Green Growth launches second hostile bid for cannabis producer Aphria

U.S. cannabis retailer Green Growth Brands Inc said on Tuesday it would make a second all-stock takeover bid for Aphria Inc, valuing the Canadian pot producer at about $2.35 billion.

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 last year.

Green Growth said it would offer 1.5714 shares for each Aphria share, representing a premium of about 25 per cent to Aphria’s closing price on the last trading day before its first hostile bid.

Based on Green Growth’s close on Tuesday, the offer values Aphria shares at about $9.40, compared with its closing price of $9.43.

In December, Green Growth offered to buy Aphria, which rejected the bid saying it “significantly” undervalued the company.

Green Growth had also disclosed at the time that it acquired a “meaningful toehold position” in Aphria, but did not reveal the size of the stake.

Aphria did not respond to a request for comment after market hours on Tuesday.

A potential merger will create the only large-scale cannabis company to bridge U.S. and Canadian markets, Green Growth said as it called on Aphria shareholders to take the offer.

Aphria’s Canadian supply and Green Growth’s U.S. footprint would position the combined company to “capitalize on the massive growth opportunities in North America and beyond,” said Peter Horvath, who was formally appointed as the chief executive officer of Green Growth on Tuesday.

Horvath earlier served as the CEO of Green Growth’s operating subsidiary.

Green Growth said the offer will commence on Wednesday and Aphria shareholders will have time until 5 p.m. ET, May 9 to accept it.

Green Growth said it had retained Canaccord Genuity as its financial adviser and Norton Rose Fulbright Canada LLP as its legal adviser.

© Thomson Reuters 2019

Published at Wed, 23 Jan 2019 12:21:56 +0000