U.S. firm launches second hostile bid for pot producer Aphria


Reuters — U.S. cannabis retailer Green Growth Brands said on Tuesday it would make a second all-stock takeover bid for Aphria, 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 share in Leamington, Ont.-based Aphria, 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 each, compared with its closing price of $9.43.

Aphria said separately the terms of Green Growth’s latest offer were “substantially identical” to the unsolicited proposal on Dec. 27, and urged shareholders to take no action until its board decides on the matter.

Aphria said an independent committee of its board will consider Green Growth’s offer before making any formal recommendation.

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.

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 CEO of Green Growth on Tuesday.

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

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

— Reporting for Reuters by Ishita Chigilli Palli and Ismail Shakil in Bangalore.

About the author


Stories from our other publications