Connect with us

Business News

Green Growth Brands to launch hostile bid for pot producer Aphria

Published

on


Aphria CEO Vic Neufeld poses near a wall covering of a marijuana leaf at a party the day before Canada’s legalization of recreational cannabis in Toronto, Ontario, Canada October 16, 2018. REUTERS/Chris Helgren

(Reuters) – U.S. cannabis company Green Growth Brands Ltd (GGB.CD) said on Thursday it would make a takeover bid for Aphria Inc (APHA.TO), valuing the Canadian pot producer at C$2.8 billion ($2.06 billion).

The all-stock offer comes at a time when several companies are looking to partner with or buy pot firms to explore opportunities in the Canadian cannabis sector after the country legalized recreational use of marijuana in October.

Green Growth would offer 1.5714 shares for each Aphria share, representing a premium of 45.5 percent over Aphria’s closing price on the Toronto Stock Exchange on Dec.24. The offer is based on a valuation of C$7.00 per Green Growth share.

Aphria did not immediately respond to a request for comment.

Green Growth said it had engaged Aphria’s board for a “friendly business combination” before launching the hostile bid and claimed it has the support of Aphria shareholders who hold about 10 percent of the outstanding shares.

The company disclosed that it has acquired a “meaningful toehold position” in Aphria, but did not reveal the size of the stake.

U.S. listed shares of Aphria (APHA.N) rose 23 percent after the bell.

Canaccord Genuity is Green Growth’s financial adviser and Norton Rose Fulbright Canada LLP its legal advisor. Kingsdale Advisors is its strategic shareholder and communications advisor and depositary.

Reporting by Munsif Vengattil in Bengaluru; Editing by Arun Koyyur

Comments

comments

Facebook

Trending