Aurora Cannabis Inc. announced that it has been successful in its C$1.1-billion ($852-million) bid to acquire CanniMed Therapeutics Inc. The Edmonton-based cannabis company expressed hopes to finalize its acquisition of all issued and outstanding common shares of CanniMed as soon as possible.
Aurora’s announcement came around three months after launching a hostile takeover bid for the Saskatoon-based CanniMed. Its original C$24-per-share offer had been significantly lower than what CanniMed stockholders were willing to take.
It can be recalled that Aurora had to revise its offer to C$43 per share. Under the revised offer, Aurora will pay the equivalent of this value in cash, in Aurora shares, or a combination of the two, subject to the prorating of C$140 million that it will make available in cash.
Aurora won the support it needed for the stock-and-cash deal last week.
Aurora is now expected to begin the process of merging the two companies. Aurora said that 70.66 percent of CanniMed shares have been tendered to its offer ahead of the March 9 deadline and it will now pay for these shares as soon as possible.
According to the announcement, Aurora is going to issue 50.6 million shares and pay about C$98 million in cash for the CanniMed shares that have been tendered as of Thursday last week.
Moreover, the offer for CanniMed’s remaining outstanding shares has been extended by 15 days to March 25. This is pursuant to the applicable Canadian securities laws that require Aurora to grant an extension of its offer.
There is no guarantee, however, that Aurora would extend its offer further after March 24, so CanniMed shareholders are urged to tender as soon as they can.
Aurora CEO Terry Booth said that the company will immediately start integrating CanniMed into the Aurora organization. They will also start to execute and realize the strategic synergies they have identified.
Booth also pointed out that combining two leading international cannabis brands is going to create a company that’s well-positioned to capitalize on and take advantage of the opportunities in the domestic and international medical cannabis markets and in Canada’s adult-use market once it is legalized.
Meanwhile, Aurora spokesman Cam Battley explained that the company is still satisfying certain material conditions before the transaction can be completed.
The Aurora-CanniMed takeover comes amid a rather unstable time for Canadian marijuana stocks, with shares sliding down from the highs it experienced in early January. The cannabis industry also saw a wave of consolidation as players seek to gain larger market share before Canada launches the sale of recreational cannabis later this year.
Aside from Aurora and CanniMed, Aphria Inc. agreed to acquire Nuuvera Inc., which is a cannabis company headquartered in Brampton, Ontario, for C$826 million.
About CanniMed Therapeutics Inc.
A leader in the Canadian medical cannabis industry, CanniMed is a plant biopharmaceutical company with 17 years of experience in pharmaceutical cannabis cultivation, world-class research and development platforms, and state-of-the-art and GMP-compliant production process with a wide range of pharmaceutical-grade cannabis products.
Through its subsidiaries, CanniMed was the first producer to be granted a license under the Marihuana for Medical Purposes Regulations, which was the medical cannabis system before the current one – Access to Cannabis for Medical Purposes Regulations – was institutionalized. CanniMed was the sole supplier of medical cannabis to Health Canada under the former system for 13 years. It has been producing consistent and safe medical cannabis for thousands of patients in Canada, with zero incidents of product recalls or diversion.
About Aurora Cannabis
Aurora Cannabis Inc. is a licensed producer of dry cannabis and other cannabis medical cannabis. It is Canada’s second largest publicly traded and federally regulated cannabis producer, after Canopy Growth Corp. Aurora trades on the TSX or the Toronto Stock Exchange under the symbol ACB.
As of January 2018, Aurora is considered North America’s fastest growing cannabis company, and is licensed by Health Canada under the Access to Cannabis for Medical Purposes Regulations. It is also licensed under the European Union under the Good Manufacturing Practices certification.