When we last talked about AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) here on Street Register, the company had just announced its intent to make an offer to purchase all of the issued and outstanding common shares of CanniMed Therapeutics Inc. (TSX: CMED).
The Offer Price represented a 56.9% premium over the closing price of CanniMed Shares on the last day prior to the public disclosure of Aurora’s intention to pursue a combination with CanniMed, and the CannaMed board refused to engage with Aurora in any discussions whatsoever. CEO Terry Booth then communicated their refusal to enter into such talks, would leave Aurora no alternative but to launch a formal offer for the company.
In response to the strong offer made by AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) the CannaMed board chose to adopt a “Poison Pill” shareholder rights plan to thwart a potential deal. That’s where the story starts to get really good. Aurora unleashed a scathing reply in the form of an accusatory PR that implies the CannaMed board isn’t abiding by its duty to its shareholders. Furthermore the company accused them of being in violation of Canadian securities law for their action.
Aurora believes that the actions taken by the CanniMed Board in adopting the Poison Pill could lead to inferior CanniMed shareholder value relative to the Aurora Offer, which provides significant value, today, a 75% premium to the 20-day VWAP of CanniMed shares prior to public disclosure of Aurora’s intention. Furthermore, Aurora’s Offer provides CanniMed shareholders with the opportunity to participate in the growth of the industry, alongside Aurora’s exceptional execution track record.
Cam Battley, Aurora’s Executive Vice President said: “Since launching our offer, the feedback we have received from CanniMed’s shareholders has been overwhelmingly positive. Many of CanniMed’s shareholders are telling us that our offer represents an excellent premium for their CanniMed shares, and clearly see the considerable upside potential by becoming Aurora shareholders. The actions of CanniMed’s management and Board, however, seem contrary to the wishes of CanniMed shareholders. CanniMed has adopted oppressive poison pill tactics, which appear to be driven solely by entrenched self-interest, and that purposely limit their shareholders’ rights and ability to choose.” (Source: Canada Newswire)
Aurora has announced that it will fight the resistance from the CannaMed board, including making a report to the proper regulatory commissions. Meanwhile, in a separate storyline, the company has also just announced the closing of its offering of 115,000 special warrants, including the exercise, in full, of the over-allotment option, through Canaccord Genuity Corp. for gross proceeds of CAD $115 million.
We have yet to run across a cannabis company in either Canada or the US with the drive and ambition that Aurora has demonstrated over the last year. That’s precisely why we’ve stuck with it the entire way, and have no intentions to end our coverage any time soon. The tenacity with which the company executes its ongoing expansion has been a pleasure to watch. We mustn’t forget that with all these other developments happening, ACBFF is still poised to become one of the most prominent players in the Canadian cannabis business, which is set to simply explode in 2018 with the nationwide end of prohibition, slated for July. Keep it locked to Street Register for updates, and we’ll deliver those important developments on ACBFF to you as they unfold. In the meantime, if you’ve yet to sign up for our 100% free newsletter, do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in ACBFF stock, short or long.