Ruling in cannabis hostile takeover fight
OSC orders CanniMed rights plan cease-traded, Aurora to amend disclosures
Both sides of a takeover dispute between two Canadian cannabis companies say they’re pleased with a regulatory ruling that gives each of them some of what they were seeking.
Any securities issued by CanniMed Therapeutics Inc. as a defence against a hostile takeover by Aurora Cannabis Inc. will be cease-traded, the Ontario Securities Commission announced Wednesday.
Aurora, for its part, will be required to amend its takeover bid circular and related press releases to include certain information that could affect CanniMed’s shareholders when they decide to accept or reject the offer, the OSC said.
Among other things, Aurora is ordered to disclose how it became aware that CanniMed’s board would meet on Nov.13 to consider an agreement to buy Newstrike Resources Ltd. — a deal that Aurora wants abandoned.
The OSC said it denied other relief sought by Aurora, CanniMed and a special committee of CanniMed’s board.
CanniMed said it was pleased the regulators had ordered more information disclosure in the takeover bid materials.
It also was pleased that regulators rejected Aurora’s request to shorten the minimum 105-day period for shares to be deposited to its offer.
“Aurora’s attempt to reduce the minimum bid period was inappropriate and clearly an attempt to pressure CanniMed shareholders into tendering to the coercive hostile bid by unfairly shortening the statutorily required bid period,” CanniMed said in a statement.
Aurora said it was pleased that the regulators had neutralized CanniMed’s poison pill defence, which involved issuing additional shares.
It also welcomed the rejection of CanniMed’s argument that Aurora’s offer was an “insider bid” in concert with other CanniMed shareholders holding about 36 per cent of its shares.
Aurora acknowledged that it is re- quired to amend its takeover circular and two related November press releases by Jan. 12.
“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,” Aurora CEO Terry Booth said in a statement.
Booth also urged CanniMed shareholders to vote against its acquisition of Toronto-based Newstrike, one of the conditions of Aurora’s offer.
The OSC order, which was dated Dec. 22 but made public Wednesday, was made following a joint hearing last week involving both the Saskatchewan and Ontario securities commissions.