Reuters — U.S. cannabis company Green Growth Brands said on Thursday it would make a takeover bid for Aphria Inc., valuing the Canadian pot producer at $2.8 billion.
The all-stock offer comes at a time when several companies are looking to partner with or buy pot firms to explore opportunities in the Canadian cannabis sector after the country legalized recreational use of marijuana in October.
Columbus, Ohio-based Green Growth would offer 1.5714 shares for each Aphria share, representing a premium of 45.5 per cent over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24. The offer is based on a valuation of $7 per Green Growth share.
Leamington, Ont.-based Aphria did not immediately respond to a request for comment.
Green Growth said it had engaged Aphria’s board for a “friendly business combination” before launching the hostile bid and claimed it has the support of Aphria shareholders who hold about 10 per cent of the outstanding shares.
The company disclosed that it has acquired a “meaningful toehold position” in Aphria, but did not reveal the size of the stake.
U.S. listed shares of Aphria rose 23 per cent after the bell.
— Reporting for Reuters by Munsif Vengattil in Bangalore.