Canadian cannabis licensed producer (LP) Aphria (TSX:APHA,NYSE:APHA) has officially rejected Green Growth Brands‘ (CSE:GGB) hostile takeover bid, the LP said in a statement on Wednesday (February 6).

In the announcement, Aphria said its board of directors agrees the hostile bid proposition “significantly undervalues” the company and would have negative effects, including being delisted from the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE).


Green Growth filed its formal offer to acquire Aphria and all of its issued and outstanding shares on January 23. The deal would have given Aphria shareholders 1.5714 common shares of Green Growth for each Aphria share.

The takeover bid by Green Growth was first revealed at the end of last year, with the US operator giving a valuation of Aphria at approximately C$2.8 billion.

“The Aphria Board of Directors unanimously believes that [Green Growth Brand’s] hostile offer is significantly undervalued and inadequate and not in the interest of Aphria shareholders on multiple grounds,” Irwin D. Simon, independent board chair of Aphria, said in Wednesday’s release.

The LP’s board members said the hostile takeover reflects a 23-percent discount to its average share price, which is based on Green Growth and Aphria’s 20-day volume-weighted average prices before Green Growth’s initial proposal on December 27.

Aphria also said the hostile takeover would result in its shareholders giving Green Growth a 36-percent interest in the LP “in exchange for shares in a company with limited operations or other experience in the cannabis industry.”

The LP also claims that Green Growth has “no material synergies” and that Green Growth’s US retail concept “would contribute little to Aphria’s established Canadian and international medical and adult-use cannabis operations.”

In Green Growth’s formal takeover bid, the company said the “combination of the two companies is extremely compelling,” with the offer representing an “unparalleled enhancing opportunity and is a superior alternative to the status quo at Aphria.”

“Green Growth invites Aphria shareholders to join Green Growth Brands in an exciting value-enhancing opportunity to create the only large-scale cannabis company to bridge US and Canadian markets,” Green Growth said in its January release.

However, Aphria claims it is committed to carrying out its own plans and intends to continue growing and providing value to its shareholders. Simon said:

“By virtue of our strong platform and competitive advantages, Aphria has multiple near-term opportunities to profitably grow and create substantial value for its shareholders. These include expanding production and automation to secure long-term cost and scale advantages, expanding in the global medical-use market in Europe, Latin America and the Caribbean, acquisition of increased market share in the Canadian adult-use markets, and developing new products for the burgeoning cannabis health and wellness sector. A hostile takeover by GGB ignores this bright outlook, which is another reason why the Aphria Board strongly urges shareholders to reject the bid.”

As of the time of this writing, Green Growth Brands had not released an official statement regarding Aphria’s rejection on its website, and declined a request for comment from the Investing News Network.

Shares of Aphria on the TSX were down 9.03 percent following Wednesday’s announcement, closing the trading session at C$12.80. Meanwhile, Green Growth Brands saw a 7.16-percent dip in value to close at C$5.45.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Jocelyn Aspa, 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.

Keep reading... Show less

An Emerging Markets Sponsored Commentary

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.

Keep reading... Show less

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.

Keep reading... Show less

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.

Keep reading... Show less

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).

Keep reading... Show less