Must be the drugs

28 December 2018 By John Foley Follow @johnsfoley

Pot retailer Green Growth is mulling a hostile all-stock bid for the $2 bln Canadian grower. Synergies are negligible, the 46 pct premium is illusory and the target would lose listings in New York and Toronto. A brave try, but one Aphria would have to be high as a kite to accept.

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Cannabis retailer Green Growth Brands plans to make an all-stock takeover offer for Canadian marijuana producer Aphria, it said on Dec. 27.

The target said on Dec. 28 that the potential approach, which is not yet a formal bid, significantly undervalued the company.

Green Growth plans to offer 1.6 of its own shares per Aphria share, marking what it described as a 45.5 percent premium to the target’s closing price on Dec. 24.

The bidder’s stock closed at C$4.98 on Dec. 27. Green Growth has based its proposal on a C$7 share price, however, saying that it is separately negotiating a C$300 million equity raising at that value.

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