Pot producer attracts 56% premium in stock-cash bid
Aurora Cannabis makes $24-a-share offer for CanniMed
AT THE request of Investment Industry Regulatory Organization of Canada, Aurora Cannabis Inc. has disclosed a proposal to acquire all of the issued and outstanding common shares of CanniMed Therapeutics Inc. The proposal was delivered to the board of directors of CanniMed on Nov. 13, 2017, and Aurora is seeking to pursue a mutually agreed upon combination with CanniMed. CanniMed has not yet engaged in active discussions with Aurora; however, Aurora welcomes the opportunity to do so. Aurora has requested
that CanniMed’s board respond to the proposal prior to 5 p.m. PT on Friday, Nov. 17, 2017, failing which, Aurora intends to commence a formal takeover bid for CanniMed.
• The allshare proposal, valued at $24 per CanniMed share based on the closing share price of Aurora on Nov. 14, 2017, reflects a 56.9-per-cent premium over the most recent closing price of CanniMed shares on Nov. 14, 2017;
• Irrevocable lock-up agreements with approximately 38 per cent of CanniMed shareholders to vote in favour of Aurora’s proposal or tender to Aurora’s bid;
• The combination would create a global leader in the cannabis industry with a pro forma market capitalization exceeding $3.0-billion;
• Combined entity would serve approximately 40,000 active registered patients;
• Aurora-CanniMed combined would benefit from enhanced capacity for future growth with greater access to capital and liquidity, with trading volumes amongst the highest in the cannabis industry.
Pursuant to the proposal, CanniMed shareholders will be entitled to receive a maximum of $24 per CanniMed share or 4.52586207 Aurora shares, based on the 20-day volume-weighted average price of Aurora. Based on the closing price of Aurora shares on Nov. 14, 2017, this translates to 3.74415 Aurora shares for each CanniMed share. Based on the closing prices of Au rora and CanniM ed on Nov. 14, 2017, this represents a premium of approximately 56.9-per-cent premium over the closing price of CanniMed shares on Nov. 14, 2017, and a 74.7-per-cent premium over the 20-day volume-weighted average price for the period ended Nov. 14, 2017. Upon completion of the transactions contemplated by the proposal, based on the closing prices of Nov. 14, 2017, CanniMed’s shareholders will hold approximately 16 per cent of the issued and outstanding shares of Aurora.
“Aurora and CanniMed are a great fit, truly complementary, and I am convinced we can generate even greater value by combining the two companies and aligning our efforts strategically,” said Terry Booth, chief executive officer. “Aurora has the management expertise, capital markets strength, distribution channels, brand power and growth prospects to successfully integrate CanniMed into Aurora — the fastest-growing cannabis company with the sector’s most exceptional execution track record.”
Lock-up of shareholders of CanniMed
In connection with the proposal, Aurora has entered into irrevocable lock-up agreements in support of its proposal from shareholders representing approximately 38 per cent of CanniMed’s outstanding shares. Under the lock-up agreements, the locked-up shareholders are precluded from tendering or voting any of their CanniMed common shares in favour of any other acquisition proposal relating to CanniMed and are required to vote against other acquisition proposals or actions which might prevent, delay or frustrate Aurora’s proposal.
Readers are cautioned that Aurora may determine not to proceed with the proposal if: (i) it identifies material adverse information concerning CanniMed not previously disclosed by CanniMed; or (ii) CanniMed implements or attempts to implement defensive tactics in relation to the proposal.
Should a takeover bid be commenced, full details of the offer will be included in a formal offer and the takeover bid circular to be filed with securities regulatory authorities and mailed to CanniMed shareholders. The offer will be subject to certain conditions, including, but not limited to, acceptance of the offer by CanniMed shareholders owning not less than 66-2/3rds per cent of the CanniMed common shares on a fully diluted basis. Once the 66-2/3rds-per-cent acceptance level is met, Aurora intends, but is not required to, take steps to acquire all of the outstanding CanniMed common shares and other convertible securities or rights to acquire CanniMed common shares.
We seek Safe Harbor.
Karen Baxter condensed this news release (email@example.com).
Terry Dale Booth, Bruno Stephen Dobler, Jason Ronald Bradley Dyck, Barry Fishman, Michael Singer, Adam Kelley Szweras
(ACB) Shares: 400,088,035