CanniMed has rejected Aurora Cannabis’ unsolicited takeover offer; however, Aurora is now planning a hostile takeover by offering investors Aurora stock worth C$24 per CanniMed share, according to a Bloomberg report. The deal is valuing CanniMed stock 57 percent higher than its Nov. 14 closing price, and investors holding 38 percent of CanniMed shares have agreed to support the deal.
CanniMed recently announced they have agreed to acquire licensed producer Newstrike Resources for C$248 million, but Aurora contends that the terms of that deal, in particular the C$9.5 million termination fee if CanniMed moves on another deal, is “oppressive” to CanniMed shareholders.
The merger would create a firm with more than 40,000 registered patients and a capacity to produce more than 286,600 pounds of cannabis annually, Aurora said in the report. In a previous interview with Bloomberg, Aurora Executive Vice President Cam Battley said the company is seeking to expand into Europe and called the potential takeover a “game-changer” in Canada and the international markets.
Following the initial bid by Aurora last week, CanniMed advised their shareholders to take “no action until such time as the Board has had the opportunity to fully consider and make a recommendation.”
A CanniMed spokesperson told Bloomberg that the company had no immediate comment on Aurora’s latest takeover attempt.