Aurora Cannabis’ Offer to Buy CanniMed Would be Canada’s Biggest Marijuana Takeover Yet

Article by Jen Skerritt, Bloomberg News via Financial Post

Aurora Cannabis’ offer to buy CanniMed would be Canada’s biggest marijuana takeover yet A deal could spark a wave of consolidation with the larger players gobbling up the smaller ones

Aurora Cannabis Inc. proposed the largest takeover bid in Canada’s nascent marijuana market in an attempt to expand its reach into Europe.

Aurora said late Tuesday it offered to acquire CanniMed Therapeutics Inc. in an all-stock, $582 million deal that values the Saskatoon, Saskatchewan-based company at $24 a share, 57 per cent above its closing price on Tuesday.

Both sides have yet to have “active discussions” about a deal, Aurora said in a statement. It added that investors holding 38 per cent of CanniMed stock are backing the takeover, and that the company has until 5 p.m. Vancouver time on Nov. 17 to respond to its proposal before Aurora proceeds with a formal bid.

Aurora Cannabis Inc. proposed the largest takeover bid in Canada’s nascent marijuana market in an attempt to expand its reach into Europe.

Aurora said late Tuesday it offered to acquire CanniMed Therapeutics Inc. in an all-stock, $582 million deal that values the Saskatoon, Saskatchewan-based company at $24 a share, 57 per cent above its closing price on Tuesday.

Both sides have yet to have “active discussions” about a deal, Aurora said in a statement. It added that investors holding 38 per cent of CanniMed stock are backing the takeover, and that the company has until 5 p.m. Vancouver time on Nov. 17 to respond to its proposal before Aurora proceeds with a formal bid.

The company says that it has not received a formal written offer from Aurora, but that it would review the terms set out in the press release and respond by the Friday deadline.

The bid comes as the frenzy surrounding Canada’s marijuana market reaches new highs ahead of legalization in July. Shares of Aurora have more than doubled this month, giving the medical marijuana company a market capitalization of about $2.5 billion, while its revenues in the year through June were just $18.1 million. The rally has been helped by speculation it can secure a strong market position in Quebec’s cannabis market.

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