Vancouver-based Aurora Cannabis Inc. said Tuesday that it has made an all-share offer for CanniMed Therapeutics Inc., a fellow Canadian medical marijuana company.
CanniMed shareholders will be entitled to receive up to $24 per CanniMed share – a premium of approximately 56.9 per cent over their Tuesday closing price of $15.30 – or 4.52586207 Aurora shares, based on the 20-day volume weighted average price of Aurora, the company said in a release.
However, based on the $6.41 closing price of Aurora shares on Tuesday, this would actually work out to 3.74415 Aurora shares for each CanniMed share, according to the release.
At Tuesday’s prices, CanniMed shareholders would hold approximately 16 per cent of the issued and outstanding shares of Aurora if the deal closes.
“Aurora and CanniMed are a great fit, truly complementary, and I am convinced we can generate even greater value by combining the two companies and aligning our efforts strategically,” said Terry Booth, chief executive of Aurora, in a press release. “Aurora has the management expertise, capital markets strength, distribution channels, brand power and growth prospects to successfully integrate CanniMed into Aurora — the fastest-growing cannabis company with the sector’s most exceptional execution track record.”
Aurora said in a release that it had delivered its offer to CanniMed’s board of directors on Monday, seeking “a mutually agreed upon combination with CanniMed.” According to the release, Aurora requested a response before the weekend, “failing which, Aurora intends to commence a formal takeover bid for CanniMed.”
Aurora also said it has “irrevocable lock-up agreements” worth about 38 per cent of CanniMed shares.
“Under the lock-up agreements, the locked-up shareholders are precluded from tendering or voting any of their CanniMed common shares in favour of any other acquisition proposal relating to CanniMed and are required to vote against other acquisition