Shares of Canadian cannabis producer CannTrust Holdings (NYSE:CTST,TSX:TRST) dipped following the pricing of a public offering led by US banks.
The company finished the trading session on Thursday (May 2) with a drop in value of 13.06 percent in New York, closing at a price of US$5.59.
CannTrust priced its offering at US$5.50 per share for total gross proceeds of US$170 million.
In Toronto, shares of CannTrust also declined by double digits. CannTrust finished the day with a price of C$7.58 per share, representing a 12.57 percent loss in value.
“In connection with the offering, the company and the selling shareholders have granted to the underwriters a 30 day option to purchase up to an additional 4,636,363 and 818,182 common shares, respectively, at the public offering price, less the underwriting discount,” CannTrust indicated.
CannTrust originally announced the offering on April 22 and confirmed the book-running managers for the deal included top US banks such as BofA Merrill Lynch, a division of Bank of America (NYSE:BAC), and Citigroup (NYSE:C).
The rest of the underwriters are Credit Suisse Securities, Jefferies (NYSE:JEF), Canaccord Genuity (TSE:CF,OTC Pink:CCORF) and RBC Capital Markets, a division of Royal Bank of Canada (NYSE:RC,TSX:RC).
CannTrust expects the transaction to close on Monday (May 6) and will use the proceeds from the deal for general business operations, including its pursuit of a good manufacturing process certification.
Justin Ort, partner at Measure8 Venture Partners, told Bloomberg the offer is too big. His firm is now shorting CannTrust, according to the report.
“As it turns out, a US$200 million offering on a US$650 million market cap is a lot to ask and investors demanded a big discount,” Ort said.
In February, CannTrust became the fourth Canadian marijuana firm to reach the New York Stock Exchange.
“There’s no doubt in my mind that investors all around the world, in particular institutional investors, have an increasing awareness and willingness to enter the cannabis space,” Peter Aceto, CEO of CannTrust, previously told the Investing News Network.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
In the evolving rush of mergers and acquisitions (M&A) in the Canadian cannabis market, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced it will acquire The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) in a deal worth approximately C$435 million.
Meanwhile, a cannabis operator in the US confirmed this week that it will receive a financial boost from a partner to solidify its position in the burgeoning Pennsylvania state market.
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Revive Therapeutics Ltd. (“Revive” or the “Company”) (CSE: RVV, USA: RVVTF), a specialty life sciences company focused on the research and development of therapeutics for medical needs and rare disorders, would like to provide the following dial-in information for the Company’s upcoming Annual and Special Meeting (the “Meeting”) scheduled to be held at 11:00 a.m. Eastern Daylight Time on April 12, 2021. Shareholders and proxyholders may access the Meeting via teleconference by dialing 647-723-3984 or 1-866-365-4406 from Canada or the United States, then entering participation code “8487744” followed by the pound (“#”) sign.
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