Reuters — Medical marijuana company CanniMed Therapeutics has asked federal regulators to intervene as it seeks to prevent a hostile takeover by bigger rival Aurora Cannabis Inc.
Saskatoon-based CanniMed said Monday it asked the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission to declare that Aurora’s move to take its buyout offer directly to CanniMed shareholders constituted an insider bid.
An insider bid is a takeover offer made by a company insider or their affiliates within a year before the bid. Canadian securities laws demand disclosure, review and approval processes in the event of such a bid to protect minority shareholders.
CanniMed said SaskWorks Venture Fund, Apex Investments, Golden Opportunities Fund and Vantage Asset Management — its “locked-up” shareholders — acted jointly with Aurora.
Aurora — based at Cremona, Alta., northwest of Calgary — offered to buy CanniMed last month but CanniMed adopted a plan to prevent shareholders from entering agreements with Aurora, viewing the deal to be “coercive.”
“We had hoped to make this a friendly and collaborative process, but Mr. Zettl (CanniMed CEO Brent Zettl) refuses to even pick up the phone or return our calls to have a discussion,” Aurora said on Monday in response to CanniMed’s move.
Aurora has sought acquisitions to expand in Canada and abroad amid expectations that Canada will soon legalize the production, sale and consumption of recreational marijuana.
CanniMed on Monday publicly urged its shareholders to reject the Aurora proposal and to separately approve a proposed stock swap deal for control of Brantford, Ont.-based cannabis producer Newstrike Resources.
Newstrike is the parent company for Up Cannabis Inc., which in May announced a strategic partnership for “branding initiatives and product development” with Canadian rock band The Tragically Hip.
CanniMed announced its proposed deal for Newstrike in mid-November shortly after Aurora announced its intention to mount a bid for CanniMed.
“Now is not the time to tender to Aurora’s hostile bid because CanniMed is poised to capitalize on a significant market opportunity in a real way with the Newstrike acquisition,” CanniMed said in a release Monday.
— Reporting for Reuters by Yashaswini Swamynathan and Taenaz Shakir in Bangalore. Includes files from AGCanada.com Network staff.