Aurora Cannabis said Monday it is proceeding with a hostile takeover attempt for CanniMed Therapeutics this week after the rival medical marijuana producer rebuffed its initial friendly bid for 544 million Canadian dollars ($425 million) in stock.
The hostile bid represents a new development in Canada’s emerging marijuana industry ahead of next year’s planned legalization of recreational cannabis.
Aurora announced its intention to acquire all issued and outstanding common shares of CanniMed last week and offered to open talks with the Saskatchewan-based company.
So far, however, CanniMed has declined to communicate with its larger rival, according to Aurora.
Instead, CanniMed said last week it had reached an agreement to buy Ontario-based Newstrike Resources Ltd. (TSX Venture Exchange: HIP) in an all-stock deal.
Aurora called CanniMed’s move a “poison pill” tactic and said it would take its offer directly to CanniMed’s shareholders.
Aurora said it already has secured the approval of CanniMed’s three largest shareholders, accounting for 38% of its shares.
What you need to know:
- Aurora (Toronto Stock Exchange: ACB) said its proposed offer – currently valued at CA$24 per CanniMed share – represents a 56.9% premium to CanniMed’s closing price on Nov. 14, the day before Aurora first announced the offer.
- It’s unclear if CanniMed board member Rob Duguid’s resignation, announced Monday, is related to the Aurora offer.
- If successful, Aurora’s offer to purchase CanniMed would be the largest acquisition to date in the North American marijuana industry.