This story was updated on 12/13/2017 to reflect additional information.
Aurora Cannabis (ACBFF) fired back at CanniMed Therapeutics (CMMDF) after the latter released a statement saying it was appealing to the government and regulators to reject the hostile takeover. Aurora is offering CanniMed shareholders a 57% premium over the stock price and it was not happy that CanniMed suggested to the regulators that by rejecting the deal CanniMed shareholders would get better returns on their investment.
CanniMed Chief Executive Officer Brent Zettl also suggested that the company would lose jobs and that patients wouldn’t receive a quality product. Aurora said in a statement, “Aurora has previously stated publicly that the Company intends to continue to invest in and expand operations and employment in Saskatchewan. Such investment will include accelerating the pace of completion of CanniMed’s expansion project, and elevating the quality of CanniMed’s production practices and standard operating procedures to achieve European Union (EU) Good Manufacturing Practices (GMP) certification – which Aurora has already achieved at its Aurora Mountain facility in Cremona, Alberta.”
According to Aurora, The Star Phoenix reported that the Government of Saskatchewan rejected the CanniMed CEO’s outreach and that a spokesperson with the Ministry of Economy said it “views this strictly as a commercial transaction, and will not be commenting further.” However, on Tuesday, The Ontario Securities Commission scheduled a hearing for December 20 on CanniMed Therapeutics’ request to intervene in a hostile takeover bid by bigger rival Aurora Cannabis.
Aurora Fights Back In War Of Words
“This is the latest in a series of increasingly desperate schemes by CanniMed management that would have the effect of disenfranchising their own shareholders and preventing them from exercising their fundamental rights,” said Terry Booth, CEO of Aurora. “We made a bona fide offer, featuring a compelling premium that 38% of existing CanniMed shareholders immediately supported and continue to support through lockup agreements, including two prominent Saskatchewan-based investment funds. We had hoped to make this a friendly and collaborative process, but Mr. Zettl refuses to even pick up the phone or return our calls to have a discussion. So we took our offer directly to CanniMed shareholders. In response, CanniMed’s management and Board adopted several poison pills that will have the effect of diluting CanniMed’s stock, draining the company’s cash resources and directly taking money out of its shareholders’ pockets. Now, management, in a last ditch effort, has tried and failed to use the provincial government to keep them in control and protect them from their own shareholders. That’s not what I call acting in the best interests of their shareholders.”
CanniMed’s share price increased 27.5% between its Initial Public Offering on December 29, 2016, and Aurora’s offer to acquire CanniMed on November 13, 2017. It was lately trading on the OTC Market at $$15.56, down from its 52-week high of $17.15. Aurora’s share price increased by 180% over the same period and was lately trading at $5.62, a bit lower than its 52-week high of $6.86.