Proactive Investors - Run By Investors For Investors

Aphria rebuffs Green Growth Brand's hostile takeover bid

The potential takeover would have had 'negative repercussions, including delisting from the TSX and NYSE and a potential reduction in interest from strategic partners,' according to Aphria
merger metaphor
Aphria's board called US rival Green Growth a company with 'limited' operations

Aphria Inc shares (NYSE:APHA) slid Wednesday after the Canadian cannabis producer rebuffed US rival Green Growth Brands Inc’s hostile takeover bid on the view that it “significantly undervalued” the company and is “inadequate”.

Green Growth first put an offer to buy Aphria on the table in December, which was also rejected, and then last month, introduced a second nearly identical unsolicited bid for Aphria, which put its value at roughly C$2.35 billion (US:$1.76 bn).

READ: Green Growth Brands pursues Aphria with second hostile bid

On Wednesday, Aphria issued a statement saying its board had moved to reject the hostile bid, arguing that it would have given Green Growth shareholders a 36% interest in Aphria in exchange for shares in a company with "limited" operations.

“The Aphria Board of Directors unanimously believes that GGB’s hostile offer is significantly undervalued and inadequate and not in the interest of Aphria shareholders on multiple grounds,” said Irwin Simon, Aphria’s board chairman in a statement.

The potential takeover would also have had “negative repercussions, including delisting from the TSX and NYSE and a potential reduction in interest from strategic partners,” according to the statement.

Aphria’s shares took a hit last December in the wake of the release of a critical report from short sellers Quintessential Capital Management and Hindenburg Research, which cast doubt on the company’s dealings in Latin America. In response to the criticism, Aphria’s board appointed a special committee to investigate the short-sellers’ allegations.

News of Aphria’s rejection of Green Growth’s bid also comes at a time of uncertainty for Aphria’s management. Last month, Aphria’ said its CEO and co-founder Vic Neufeld will step down from the company’s helm.

Investors failed to applaud the news, sending Aphria shares down 6.16% to $10.05 before the opening bell on Wednesday.

Contact Ellen Kelleher at [email protected]

Join Proactive’s Crypto, Blockchain and Cannabis Telegram group here
View full APH profile View Profile

Aphria Timeline

Related Articles

The Green Organic Dutchman windmill in a field
December 12 2018
TGOD has been building out its facilities in Ontario, Quebec, and Jamaica, expecting to reach combined production of 170,000 kilograms of cannabis around 2020
Sydney Harbour Bridge
January 22 2019
A phase I study in Australia is evaluating a cannabis spray therapeutic in cancer patients.
The R&D programme is intended to address the increasing prevalence of obesity and diabetes using smart siRNA
October 30 2018
The health sciences company noted that the plan was formulated at a recently held two-day intensive workshop which together leading scientific teams from the QIMR Berghofer Medical Research Institute in Brisbane and Murdoch University in Perth
Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use