Aphria says Green Growth Brands' takeover bid undervalues cannabis company
Aphria Inc (TSX:APH) (OTCQB:APHQF) said Monday that a takeover bid from Green Growth Brands Ltd (CSE:GGB) undermines the Canadian cannabis producer.
Green Growth’s all-stock offer would value Aphria at around C$2.1 billion, or about C$11 per share.
Aphria’s shares dipped more than 6% to US$5.86 in Monday pre-market trading.
“We believe our offer will create value for both Aphria and Green Growth shareholders,” Green Growth CEO Peter Horvath said in a press release. ”We are confident that the significant premium we are offering and the opportunity to participate in the growth of a stronger, combined company are so compelling that we are taking our offer directly to Aphria’s shareholders.”
Horvath, a retail veteran and former executive at American Eagle Outfitters Inc (NYSE:AEO) and DSW Inc (NYSE:DSW), looks to combine his experience with Aphria’s cannabis expertise.
Green Growth recently began trading on the Canadian Securities Exchange following a reverse takeover of Xanthic Biopharma Inc.
Aphria chair Irwin Simon said that the deal “significantly undervalues” the company and expressed concern about Green Growth’s brokered financing of C$300 million.
“The proposed offer is quite risky given GGB’s condition to complete a brokered financing at a price that is more than double the recent average of their share price, as a key term to the proposal,” said Simon in the company’s response.
Aphria’s board said it has set up an independent committee of directors to review the proposal.
Contact Lenore Fedow at [email protected]
Follow her on Twitter: @LenoreMariee
Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/211808/aphria-says-green-growth-brands--takeover-bid-undervalues-cannabis-company-211808.html
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