AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) has been one of our favorite stocks to talk about in 2017, not just in the Canadian Cannabis sector, or even the Cannabis space as a whole, but overall. Recently, we’ve taken a break from focusing on the company’s ever expanding cannabis empire, to dover a very interesting subplot that has been developing for the last several weeks.
It began when Aurora announced its intent to make an offer to purchase all of the issued and outstanding common shares of CanniMed Therapeutics, followed by the CannaMed board refusing to engage with Aurora in any discussions whatsoever, despite its offer representing a big premium over the market value of CannaMed shares. It led the company to take official action with Canadian securities regulators, and we’ve recently received word of the latest on that story.
AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF) commented on the report following hearings before the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission held on December 20-21 in connection with Aurora’s offer to acquire all of the shares of CanniMed Therapeutics Inc.
Aurora applied to the Securities Regulators for an order to cease trade the shareholder rights plan that CanniMed’s management adopted on November 28, 2017 , and to shorten the minimum deposit period under the Offer from 105 days, to 35 days, from the date of the Offer.
CanniMed and the Special Committee of the Board of CanniMed, in turn, sought orders to prevent Aurora from acquiring up to 5% of the outstanding shares of CanniMed on the open market, to deem Aurora to be acting jointly or in concert with the locked-up shareholders of CanniMed, and deem the Offer an “insider bid”.
The Securities Regulators denied the Aurora application to reduce the minimum deposit period and as a result the minimum deposit period will remain open for the minimum 105 day period. In respect of all other applications made by Aurora and those made by CanniMed the Securities Regulators ruled entirely in favour of Aurora; including making an order to cease trade the CanniMed Poison Pill. The Securities Regulators also rejected the argument that Aurora’s bid was an “insider bid” and as such Aurora does not require a formal valuation.
Further, the Securities Regulators rejected CanniMed’s application to restrict Aurora’s ability to make normal course purchases of CanniMed shares on the open market. Furthermore, CanniMed’s application to determine that Aurora and the Locked-Up Shareholders had acted jointly or in concert, and to deem the Offer an insider bid, were also both rejected.
“Aurora has secured key legal victories that take us a big step forward towards acquiring CanniMed, and integrating its team and operations into our organization to further build the preeminent global cannabis company,” said Terry Booth, CEO. Mr. Booth added, “The next step is for CanniMed shareholders to vote against the proposed acquisition by CanniMed of Newstrike Resources. The proposed Cannimed-Newstrike transaction is a bad deal that will destroy considerable value for CanniMed’s shareholders. It would give away 35% of CanniMed to shareholders of a company with no cash, zero revenues, uncompleted and unfunded facilities that CanniMed would have to use its own cash reserves to build out.”
Mr. Booth added, “The great news today is that CanniMed shareholders are now freed from CanniMed management’s efforts to take away their fundamental right to support the superior opportunity. CanniMed shareholders can now freely choose. On one hand, there is the highly dilutive, cash-draining Newstrike bid. On the other hand, shareholders can tender their shares to Aurora’s Offer for an immediate significant 57% premium, plus the opportunity to become part of Aurora’s faster growth, better execution, shareholder value generation, and exciting drive to global leadership in the cannabis sector.” (Source: Canada Newswire)
Given the entire set of events concerning Aurora and its intended acquisition of CannaMed, and now this latest revelation from the securities commission, we would be very surprised if the company did not ultimately end up as the new owners of CannaMed. We’ll be sure to stay current on the story right here. 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