In the most valuable cannabis industry deal to date, Canadian medical cannabis producers Aurora Cannabis Inc and CanniMed Therapeutics have entered into a support agreement that will create the most valuable cannabis company in the world. The deal, which comes months after Aurora set in motion a hostile takeover bid of CanniMed and led to the target adopting a shareholder rights plan – or poison pill – to thwart the sale, is worth C$1.1 billion ($852 million).
Under the deal, CanniMed shareholders may receive 3.40 Aurora shares or a combination of cash and shares. The share offers, at $43.00, represent a 181 percent premium over the closing price of CanniMed shares on Nov. 14, 2017.
“We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world. Market recognition of Aurora`s continued performance and strategy execution since we first announced our intention to acquire CanniMed allows us to share that benefit directly with CanniMed shareholders by increasing the offer price, as well as by offering a cash component.” – Terry Booth, Aurora CEO, in a press release
The deal will force CanniMed to terminate its agreement to purchase Newstrike Resources, which will result in a $9.5 million break fee paid to Newstrike.