TORONTO — Organigram Global Inc. has signed a deal to buy Aurora Cannabis Inc. in an agreement that values the company at $561 million, after a hostile offer from Curaleaf was rebuffed earlier this year.
Organigram CEO James Yamanaka said the transaction is a defining step in the company’s strategy to build a disciplined, global cannabis leader.
“By bringing together Aurora’s established global medical cannabis platform with our Canadian operations and growing international footprint, we are creating a larger, stronger, and more diversified company,” he said in a news release Tuesday.
Under the offer, Aurora shareholders have the option to receive $7.80 per share in cash, 5.8626 Organigram shares per share or a combination. The total cash available is capped at $253.6 million, while the number of shares available under the offer is limited to 205.8 million.
The transaction has received unanimous support from the board of directors at both firms. The companies said the deal represents a 93 per cent premium to Aurora’s share price as of Aug. 10 and a 21 per cent premium to the implied value of the Curaleaf offer, which was amended on Oct. 6.
Aurora executive chair and CEO Miguel Martin said the offer is the result of a robust strategic review process and delivers compelling value.
“Combining with Organigram will accelerate Aurora’s international growth strategy by strengthening commercial execution, expanding our product and (research and development) capabilities, and extending our global operating network,” he said.
The deal comes after Curaleaf Holdings Inc. made a hostile offer for Aurora earlier this year.
Stamford, Conn.-based Curaleaf took its offer directly to shareholders in August after it said Aurora’s board refused to engage in discussions. Aurora said at the time it would consider the offer and was forming a special committee to mull the unsolicited bid.
In September, Aurora urged shareholders to reject the hostile takeover bid, saying it undervalued Aurora and was not in the best interest of shareholders.
Curaleaf sweetened the deal in October, making an offer valued at US$5 per Aurora share, based on Curaleaf’s Oct. 2 closing share price. The proposal included 0.4013 Curaleaf shares plus US$1 cash for each Aurora share.
Its previous offer had included paying Aurora shareholders US$4.00 per share, plus US$0.75 cash for each Aurora share.
In a statement issued Tuesday evening, Curaleaf said its enhanced Oct. 6 bid for Aurora remains outstanding.
“Curaleaf believes its offer represents better value, offering a superior combined business with a stronger capital markets profile, greater certainty and speed to close, and greater anticipated synergies,” the statement said.
https://ca.finance.yahoo.com/news/organigram-signs-friendly-deal-buy-155011720.html
