Aurora Cannabis Inc. is urging its shareholders to reject Curaleaf Holdings Inc.’s revised hostile takeover bid, saying the proposal “significantly” undervalues the company. According to Curaleaf, the new offer represents an 86% premium to Aurora’s unaffected 30-day volume-weighted average share price and a 217% premium on an ex-cash basis.
In a statement, Miguel Martin, executive chairman and CEO of Aurora, said the “revised offer still does not reflect the value of the company Aurora shareholders own today.”
“Aurora is debt-free with a strong cash position, and we believe the revised hostile bid continues to ask shareholders to give up that strength, and their future upside, at a discount.” — Martin in a press release
Boris Jordan, chairman of the board and CEO of Curaleaf, responded that “Aurora’s board has a fiduciary duty to shareholders, which requires it not to take illogical steps to keep the highest bidder out of the room.”
“The board has locked out Curaleaf while granting diligence access to unnamed parties and cites selective sources to support its agenda,” Johnson said in a statement. “None of that reflects a board acting in the company’s or shareholders’ best interests. Shareholders deserve the facts, and the facts favor engagement, not obstruction.”
Martin indicated that an Aurora special committee “is carefully evaluating strategic alternatives with the goal of delivering greater value for Aurora shareholders” and that since Curaleaf’s offer is open until December 4, the company believes “shareholders gain nothing by tendering now, and tendering early could undermine the opportunity for a superior outcome.”
Curaleaf contends that Aurora sold shares under its at-the-market program, without any price limit and for as low as $2.60 per share in July and that their revised bid, at $5.00 per share, represents a 92% premium at that level.
Aurora said that “the increase in consideration consists principally of Curaleaf shares at an inflated valuation” and that its shareholders would “bear the risk” since they “would remain fully exposed to any decline in the Curaleaf share price.”
Curaleaf made its hostile takeover bid for Aurora in August.
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