Aphria says proposed hostile bid undervalues company

(Video screengrab via Aphria.ca)

Reuters — Canadian cannabis producer Aphria said on Friday Green Growth Brands’ proposed $2.8 billion all-stock hostile bid “significantly” undervalued the company.

Ohio-based cannabis retailer Green Growth, which merged with Xanthic Biopharma in November, said on Thursday it would offer 1.5714 shares for each Aphria share. The company said its valuation was based on a price of $7 per share.

Leamington, Ont.-based Aphria’s shares were up 11.2 per cent at $8.42, while those of Green Growth rose 1.6 per cent to $5.06 in early afternoon trading.

Green Growth’s offer is “based on a hypothetical valuation of its own shares, with no relation to the current price,” Aphria said on Friday. The company also did not give enough time to respond, before making the offer public, Aphria added.

In an emailed statement on Friday, Green Growth CEO Peter Horvath said the offer would create value for shareholders of both companies.

“Together, we can unleash synergies between our teams, assets and geographies, forming a combined enterprise that will accelerate our collective growth strategies in Canada, the U.S. and overseas,” Horvath said.

The buyout offer is unlikely to succeed, according to Chris Damas, editor of the BCMI Cannabis Report, a newsletter on investment in cannabis stocks.

“It is an opportunistic attempt to buy a larger company and I doubt it will be successful,” Damas said.

— Reporting for Reuters by Debroop Roy in Bangalore.

About the author


Glacier FarmMedia Feed

Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.

GFM Network News's recent articles



Stories from our other publications