Could Green Growth Brands soon own one of its biggest rivals?
The company, also known as Xanthic Biopharma Inc., has made an unexpected bid to fully acquire all of the issued and outstanding common shares in Aphria Inc. that it doesn’t already own.
The offer will provide Aphria shareholders with 1.5714 common shares of Green Growth for each Aphria Share and represents premiums of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on December 24, 2018.
The deal values Aphria at approximately C$2.8 billion (US$2.1 billion) based on a valuation of C$7.00 per share for Green Growth Shares.
Prior to announcing its intention to take the offer directly to shareholders, Green Growth says it engaged Aphria’s board to attempt to negotiate a friendly business combination that included, among other things, a very short exclusivity period to allow both parties to seriously consider the combination.
“We believe our offer will create value for both Aphria and Green Growth shareholders.”
Peter Horvath, Green Growth Brands (pictured)
Green Growth says it offered, upon a friendly business combination with support from Aphria’s board, an investment of C$50 million in equity at an Aphria per share value of C$11.00.
Peter Horvath, CEO of Green Growth, said: “We believe our offer will create value for both Aphria and Green Growth shareholders. We are confident that the significant premium we are offering and the opportunity to participate in the growth of a stronger, combined company are so compelling that we are taking our offer directly to Aphria’s shareholders.
“Together, we can unleash synergies between our teams, assets and geographies, forming a combined enterprise that will accelerate our collective growth strategies in Canada, the U. S. and overseas.”
Green Growth expects to complete a concurrent brokered financing of C$300 million, at a price per share of C$7.00, to both illustrate confidence in the value of the consideration under the Offer and to fund the business growth of the combined entity.
Green Growth expects that certain of its existing shareholders will commit to backstop the C$300 million financing concurrently with the execution of a business combination agreement with Aphria or the take up of shares under the anticipated Offer.Cannabis Business Worldwide