U.S. company plans hostile takeover of cannabis producer Aphria

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A U.S. marijuana company called Green Growth Brands Ltd. announced Thursday it will make an offer for Aphria, valuing the marijuana producer at $2.8 billion.

Green Growth said Aphria shareholders would be offered 1.5714 Green Growth shares for each Aphria share.

This offer would represent a premium of 45.5 per cent over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24. That day, it closed at $7.56.

On Dec. 27, the market closed at $7.57 for Aphria.

Green Growth recently merged with Xanthic Biopharma Inc. and is trading on the Canadian Securities Exchange under the symbol GGB.

The stock price for Green Growth opened at $4.50 Thursday and closed at $4.98.

Meanwhile, Aphria has appointed Irwin D. Simon as the independent chair for the board of directors. CEO Vic Neufeld is the current chair. 

In early December, short-sellers Quintessential Capital Management and Hindenburg Research alleged that the company’s acquisition of the LATAM Holdings assets in Columbia, Argentina and Jamaica totalling $280 million from Scythian Biosciences were “largely worthless.”

Gabriel Grego, of Quintessential Capital Management, argued Aphria had spent $700 million buying up subsidiaries which don’t add any value to the company, and did little besides enriching insiders at the companies that were taken over.

Neufeld is staying on as CEO and a director on the board.

Aphria did not immediately respond to a request for comment.



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Business News

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