Green Growth says Aphria shareholders want out of ‘failed investment’ – but Aphria balks at C$11 per share takeover bid

The global cannabis industry has its very own financial soap opera to kick off 2019.

Following the public announcement of Green Growth Brands’ C$11 per share bid for Aphria in late December, the latter’s new independent Chair, Irwin Simon, dismissed the offer.

Aphria said in a press release dated December 28 that Green Growth’s offer was “approximately 23% below” its company’s 20-day share price run rate.

“[Green Growth’s] proposal falls short of rewarding our shareholders for participating in such a transaction… [and] significantly undervalues our company.”

Irwin Simon, Aphria (pictured)

Irwin Simon added that Green Growth’s “proposal falls short of rewarding our shareholders for participating in such a transaction… [and] significantly undervalues the company”.

He further poured doubt on Aphria’s ability to raise the necessary funding for such a deal, adding: “[The] proposed offer is quite risky given GGB’s condition to complete a brokered financing at a price that is more than double the recent average of their share price, as a key term to the proposal.”


Three days later, just as the New Year was set to begin, Green Growth fired back.

The company said it had seen “early expressions of interest from a growing number of frustrated Aphria shareholders who want a way out of a failed investment”.

It claimed that its offer, valued at C$11.00 per Aphria share, represented “significant and compelling premiums of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on December 24” and was “46.0% over Aphria’s volume weighted average price on the TSX for the last 10 trading days ended December 24”.

“Aphria shareholders are welcoming a 45%+ premium offer because they understand the significant value that can be unleashed by our combined teams, assets and geographies.”

Peter Horvath, Green Growth

Peter Horvath, CEO of Green Growth, said: “Since we announced our intention to launch the takeover of Aphria we have seen two things. First, Aphria shareholders are welcoming a 45%+ premium offer because they understand the significant value that can be unleashed by our combined teams, assets and geographies.

“Second, a real interest in the market to understand Green Growth and our valuation.

“When investors consider our trailing revenue, recent license wins in Nevada, and a buildout in the new market of Massachusetts they agree that it is not a question of if Green Growth reaches C$7.00 per share, but when. We understand that there are some in the market who want to focus on destroying value at Aphria, but we are committed to creating it.”

Aphria shareholders would continue to maintain control of the pro forma entity, it said, with ~60% ownership.

Green Growth shareholders would have a ~34% ownership interest, with subscribers to Green Growth’s proposed C$300 million financing (to fund the deal) holding a ~6% ownership interest.Cannabis Business Worldwide

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