NEO made a $170 million bid on BitTorrent, $50 million higher than TRON - reports

04 Sep, 2018
by Jelmer van der Dussen
News
NEO made a $170 million bid on BitTorrent, $50 million higher than TRON - reports

TRON wasn't the only cryptocurrency project interested in acquiring peer-to peer file sharing software company BitTorrent. NEO also tried to buy the company and even made the highest bid, but the offer of TRON was accepted by the board of BitTorrent nevertheless.

According to a report of Coindesk, based on comments of NEO's head of investment Weiyu Zhu and internal BitTorrent documents, NEO Global Capital (NGC) made a bid of $170 million. The accepted bid of TRON founder Justin Sun was $120 million. The reason why TRON's bid and not NEO's bid was accepted, was because the NGC offer was 'not more favorable to the company and its shareholders'.

NEO and TRON are both in the top 20 of Coinmarketcap. NEO is ranked 14th with a market cap of $1,5 billion, TRON is 13th with a market cap of close to $1,7 billion.

Sun opened talks with BitTorrent a month before NEO did, in December 2017. First, the intention of Sun was not to acquire the whole company, but to buy a controlling stake. NEO's intention was to become the sole owner of BitTorrent right from the start. The bid of NGC consisted of $115 million for all preferred stock and $55 million for all common stock. NEO hoped BitTorrent 'could build a decentralized file storage system that would be generally useful for any decentralized web project or blockchain', Coindesk reports based on comments of Zhu.

There are different explanations as to why BitTorrent didn't accept the NEO bid. It is said that the NGC at some point revised its offer. The investment arm of NEO wanted 'to exclude a provision that would nullify the acquisition if it was not completed within six months'. BitTorrent was put off by this.

According to NEO's head of investment Weiyu Zhu however, NEO started to have some doubts about the technical capabilities of BitTorrent to become the decentralized file project. Next to that, there were concerns about the political controversy in the United States following attempts of Huawei and ZTE to invest in US companies.

Eventually, BitTorrent accepted the $120 million bid of TRON founder Justin Sun.

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Read more about: NEO (NEO) TRON (TRX)

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