Advisory firm backs CanniMed deal for pot grower Newstrike

SASKATOON — CanniMed Therapeutics Inc. said a leading independent advisory firm has recommended its shareholders vote in favour of its proposed acquisition of Newstrike Resources, a deal that hostile suitor Aurora Cannabis Inc. wants quashed.

Institutional Shareholder Services Inc. said that acquiring Toronto-based Newstrike would allow Saskatoon-based CanniMed to access the recreational cannabis market while also significantly expanding its production capacity and diversifying its geographic footprint. The advisory firm also said Aurora’s all-stock hostile takeover bid for CanniMed, capped at a $24 per share offer, has effectively halved the exchange ratio and CanniMed’s expected ownership stake in the combined entity.

Aurora formally launched its hostile takeover for CanniMed in late November on the condition that CanniMed cancel its acquisition of Newstrike and said its offer will remain on the table until March 9.

CanniMed said Aurora was offering shares that were worth only half as much just two weeks before its hostile bid .