THE CANADIAN PRESS
Aurora Cannabis Inc. formally launched its all-stock hostile takeover bid for CanniMed Therapeutics Friday, on the condition that the medical marijuana producer cancel its own planned acquisition of Newstrike Resources Ltd.
The Vancouver-headquartered licensed marijuana company says in a statement it placed a newspaper ad for its offer, valued at $24 per share, and a takeover bid circular will be mailed to CanniMed’s shareholders.
“We believe that we will be able to accelerate CanniMed’s growth more effectively than current management, and so we invite and encourage CanniMed’s shareholders to tender their shares to the bid,” said Aurora CEO Terry Booth in a news release Friday.
Aurora (TSX:ACB) also outlined the conditions of its offer, including that CanniMed’s (TSX:CMED) recently proposed acquisition of The Tragically Hip-backed marijuana company Newstrike (TSXV:HIP) not proceed and be terminated.
Aurora says its offer, which would create the second-largest medical-cannabis company in Canada, will remain on the table until March 9, 2018.
This comes after Aurora first announced on Nov. 14 it submitted its takeover proposal to CanniMed’s board, and that it had agreements with shareholders representing 38 per cent of CanniMed’s outstanding shares to support its bid. It gave CanniMed until Nov. 17 to respond.
On Nov. 14, CanniMed acknowledged Aurora’s announcement but said it did not receive a formal offer. CanniMed also added it was in advanced discussions to acquire Newstrike, which has a partnership with iconic Canadian rock band The Tragically Hip. On Nov. 17 CanniMed announced it had reached a definitive agreement to acquire Newstrike.
By Nov. 20, Aurora said it did not get a response from CanniMed and planned to go hostile with its offer this week.
CanniMed said Wednesday it had formed a special committee in anticipation of a formal offer from Aurora.
Shares of Aurora Cannabis were up nearly 4 per cent in early morning trading to $7 in Toronto, while CanniMed shares were virtually flat at $20.94 and Newstrike stock slipped nearly 4 per cent to $0.51.