Curaleaf Holdings Inc. has increased its offer to acquire Edmonton-based Aurora Cannabis Inc., raising the value of its bid to $5 US per share from its earlier proposal of $4 US per share.
The Stamford, Conn.-based cannabis company said the new offer consists of 0.4013 Curaleaf shares plus $1 US in cash per Aurora share, based on Curaleaf’s closing share price on Oct. 2. The previous bid, made over the summer, offered 0.3463 of a Curaleaf subordinate voting share plus 75 cents US in cash, based on its closing price on Aug. 10.
Curaleaf said it decided to raise its bid even after Aurora rejected its earlier approaches, saying the higher offer is meant to show shareholders the value it believes would come from combining the two companies and to demonstrate it is negotiating in good faith.
Aurora’s Response
Aurora had urged its shareholders to reject Curaleaf’s original hostile takeover bid, arguing that the offer undervalued the company and was not in shareholders’ best interests.
Aurora has also pointed to differences in the two companies’ financial positions as part of its case against the deal. The company said it is debt-free and holds about $149 million Cdn in cash, while Curaleaf carries more than $1 billion Cdn in debt. Aurora argued that a takeover would give Curaleaf control over its cash reserves without shareholders being paid fairly for them.
What Comes Next
It remains to be seen whether Aurora’s board and shareholders will view the sweetened $5 US per share offer differently from the initial bid they rejected. Curaleaf has framed the increase as evidence of its commitment to pursuing a combination of the two cannabis companies.
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