Multistate cannabis operator Curaleaf Holdings is pushing back after Aurora Cannabis rejected its enhanced acquisition bid, accusing the Canadian company’s board of dismissing the offer without engaging in negotiations, according to a Curaleaf news release issued Monday.
It’s the second time Aurora has rebuffed Curaleaf.
What is Curaleaf’s offer to acquire Aurora?
Canada-based Aurora rejected an earlier offer in August that valued the company at $4 per share, citing concerns about valuation and deal structure. Curaleaf increased its offer to $5 a share in a revised Oct. 5 offering.
Aurora’s board again recommended that shareholders reject the offer, arguing that it significantly undervalued the company and exposed shareholders to risks associated with Curaleaf’s stock price.
The board also raised concerns about the proposed deal’s financial benefits and said it was exploring alternatives that could deliver greater value to shareholders.
Curaleaf, however, said Aurora’s board had refused to negotiate, arguing the enhanced offer warranted a substantive response.
“Aurora’s board has a fiduciary duty to shareholders, which requires it not to take illogical steps to keep the highest bidder out of the room,” Curaleaf Chairman and CEO Boris Jordan said in a statement.
“The board has locked out Curaleaf while granting diligence access to unnamed parties and cites selective sources to support its agenda. None of that reflects a board acting in the company’s or shareholders’ best interest.”
Curaleaf said its enhanced offer was 86% higher than Aurora’s volume-weighted average share price over the 30 days leading up to Aug. 10. The company said the premium rises to 217% when Aurora’s cash and cash equivalents are excluded from the valuation.
Curaleaf also extended the expiration date of its offer to Dec. 4.
Are other companies interested in buying Aurora?
Another Canadian licensed producer – Organigram Holdings – has expressed interest in acquiring Aurora, potentially forcing Curaleaf to raise its offer or walk away.
Aurora said its special committee is evaluating potential transactions with other companies as well as the possibility of remaining independent.
Curaleaf ranks among the largest U.S. cannabis operators by revenue and footprint. It operates cultivation, manufacturing and retail facilities in more than a dozen states and has built a growing presence in Europe.
Aurora is among Canada’s major licensed producers. In recent years, the company has shifted its focus toward global medical cannabis, with operations in markets including Germany, Poland and Australia.
