Core Scientific's largest shareholder, Two Seas Capital LP, has announced its opposition to the $9bn acquisition proposed by CoreWeave.

The alternative investment manager shared its dissatisfaction with the terms proposed on July 7, which would see AI cloud firm CoreWeave acquiring developer CoreScientific and its 1.3GW of data center capacity for $9bn in an all-stock transaction.

Under the terms of the merger agreement, Core Scientific stockholders will receive 0.1235 newly issued shares of CoreWeave Class A common stock for each share of Core Scientific common stock. Upon close, CoreWeave expects Core Scientific’s stockholders’ ownership of the combined company will be less than 10 percent.

Currently, Two Seas owns more than 19 million shares of Core Scientific's common stock, representing 6.3 percent of the company.

In a letter to shareholders, Two Seas noted its belief in Core Scientific's value and "clear runway to compound growth for many years." The company wrote: "We are therefore disappointed that the Board of Directors has chosen to sell the Company to CoreWeave, Inc. ("CoreWeave") at this inadequate valuation. The proposed all-stock, uncollared structure leaves Core Scientific shareholders exposed to the high volatility of CoreWeave's share price with no protections on the value they will receive at or following close."

Two Seas notes that it does not oppose a merger between the two companies in theory, as it is an investor in CoreWeave also, but feels the sale "materially undervalues" Core Scientific and exposes shareholders to "substantial economic risk."

No appropriate valuation - in Two Seas' opinion - was provided.

"In our view, the transaction decidedly and unfairly favors CoreWeave at the expense of Core Scientific shareholders. The fact that Core Scientific's stock price declined by 30 percent in the days following the transaction announcement strongly suggests to us that other investors agree," Two Seas added.

The investment manager has said it plans to vote against the acquisition, and encourages other shareholders to do the same.

DCD has reached out to CoreWeave and Core Scientific for comment.

CoreWeave previously sought to acquire Core Scientific in June 2024, offering $1bn for the company, though this was rejected by Core Scientific, which said the bid “significantly undervalued” the company.