Following a statement from GGB restating its intentions to pursue the takeover, Irwin Simon, chairman of Aphria, told CNBC’s Squawk Box on Wednesday (January 2) there had been no official offer for the company.
When asked if GGB could serve as a potential strategic partner, Simon said currently “absolutely not.”
“First of all there has been no official offer for the company, ok? GGB came out and said they like to either partner or merge with the company,” Simon said.
However, he added there is a possibility of a partnership at a later date due to GGB’s experience in the retail side of the cannabis industry.
On Monday (December 31) Peter Horvath, CEO of GGB, said since launching its bid, it had noticed the interest from investors of the Canadian firm due to the premium offered and a new-found interest in the valuation of his company.
“When investors consider our trailing revenue, recent license wins in Nevada, and a buildout in the new market of Massachusetts they agree that it is not a question of if Green Growth reaches C$7.00 per share, but when,” said Horvath. “We understand that there are some in the market who want to focus on destroying value at Aphria, but we are committed to creating it.”
Last Thursday (December 27), GGB made public its bid for the ownership of Aphria to shareholders of both companies
The US-based venture offered 45.5-percent premium for holders of Aphria, valued at a price of C$11 per share. In exchange shareholders would receive 1.5714 common shares of GGB.
Aphria then officially turned down the proposal, saying GGB’s offer was 23 percent below the intended target.
“The Board has determined that the GGB proposal, as it currently stands, significantly undervalues the company,” Simon said in a statement.
Market confusion on Aphria and GGB relationship
In its new update to the market, GGB said Aphria doesn’t own any stake in GGB and none of its executives act as board members for the multi-state operator.
“The clearest evidence for lack of influence in Green Growth’s acquisition of Aphria is the fact Aphria’s board has refused to engage and rejected Green Growth’s premium offer,” the company said.
The most direct connection between the two is through a JV formed between the Schottenstein Group, which backs GGB, and Liberty Health Sciences (CSE:LHS) for an application of a processing and dispensary license in Ohio.
Liberty was originally created as a division of Aphria set to establish a presence in the US. However, due to TMX Group rulings and a possible delisting from the TSX, Aphria was forced to divest its stake in Liberty.
Aphria retains an option to buy back its stake in Liberty until 2023 thanks to the deal it created to sell its portion of the US company.
The Canadian cannabis producer also notified investors its “passive investment” in Green Acre Capital Fund II represented another investment connection to GGB.
New Aphria chairman offers response to GGB situation
During the interview, Simon added there is an option for Aphria to continue its strategy alone or find a partner in the vein Cronos Group (NASDAQ:CRON,TSX:CRON) or Canopy Growth (NYSE:CGC,TSX:WEED) have done.
Simon is a recent hire of Aphria, as he was appointed an independent chairman for the board of directors, replacing Aphria’s own CEO Vic Neufeld in the role.
He was instituted following the short seller attack Aphria faced from Quintessential Capital Management and Hindenburg Research calling into question its acquisitions in the Latin American market and its partners.
Investors are still awaiting for a full response from Aphria to all the issues raised by the short sellers.
Since announcing its takeover bid, GGB’s stock has seen a jump in its price and market value.
Despite its growth on Wednesday the multi-state operator closed the trading session with a 1.08 percent decline and a price per share of C$4.60.
Aphria enjoyed an increase to its stock in New York and Toronto, as the company finished with a price of US$6.02 and C$8.15 respectively.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Green Growth Brands is a client of the Investing News Network. This article is not paid-for content.
American cannabis sales hit US$17.5 billion in 2020, a research group’s new study shows.
Meanwhile, a Canadian cannabis producer began offering CBD beverages in the US, another move that shows how interested Canadians are in the overall US cannabis market at the moment.
Some pretty important news out of health and wellness; beverage and natural products company BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) this week. For those of you following the Company with us, stay tuned.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).