The proposal was unsolicited and was presented to Aphria on the morning of December 27, with Green Growth Brands (GGB) immediately going public with its proposal, less than six hours later and after the market closed on the same day, reports New Cannabis Ventures.
Aphria rejected the planned C$2.8 billion ($2.1 billion) hostile offer, saying the bid significantly undervalued the company. GGB says it’s offer values Aphria at $11 per share or $2.8 billion at the time of the announcement and would be an all-stock transaction.
Aphria calculates that based on the 20-day volume weighted average price of GGB shares and the expressed exchange ratio of 1.5714 common shares of GGB for each Aphria share, the proposed bid would be at least 23 percent below the Company’s average share price over the same period.
Aphria wants its stockholders to know that GGB’s offer is based on “a hypothetical valuation of its own shares, with no relation to the current price.”
Irwin Simon, the chairman of Aphria’s board responded to what the company is calling a hostile takeover with the following statement on Friday: “While we appreciate GGB’s interest in the value we have created at Aphria and our significant growth prospects, their proposal falls short of rewarding our shareholders for participating in such a transaction. Further, the proposed offer is quite risky given GGB’s condition to complete a brokered financing at a price that is more than double the recent average of their share price, as a key term to the proposal.
The Board has determined that the GGB proposal, as it currently stands, significantly undervalues the company. Aphria has a tremendous market opportunity as a leader in the sector and a strategic vision to meet those opportunities. Our focus is to realize that value for the benefit of all our shareholders.”
Irwin was appointed Aphria’s independent chairman on Thursday, according to Bloomberg, replacing Vic Neufeld who remains the chief executive officer.
