Aurora Cannabis Inc. plans to take its C$582 million ($455 million) takeover offer for CanniMed Therapeutics Inc. directly to shareholders after the management of the rival Canadian marijuana grower rejected merger talks.
The process of offering investors Aurora stock worth C$24 per CanniMed share will begin this week, Vancouver-based Aurora said Monday in a statement. The bid is 57 percent higher that CanniMed’s closing price on Nov. 14, the day before Aurora first announced the offer. Investors holding 38 percent CanniMed shares have agreed to support the deal, according to Aurora.
The move to go hostile sets up a three-way takeover battle in Canada’s emerging marijuana sector, which is witnessing surging stock prices and investor interest ahead of legalization next year. CanniMed announced on Nov. 17 that it had agreed to acquire Newstrike Resources Ltd. for about C$248 million. Aurora said Monday that the terms of the Newstrike deal are “oppressive” to CanniMed shareholders.
Aurora also said its offer for CanniMed will create a company with more than 40,000 registered cannabis patients in Canada and the funded capacity to produce more than 130,000 kilos (286,600 pounds) of the marijuana annually.