Aphria in play
On December 27, Aphria (APHA) (APHQF) came in play after Green Growth Brands, Xanthic Biopharma’s business name, announced its bid to take over the company for 11 Canadian dollars per share. Following the announcement, Aphria rose nearly 31% last week—one of the best weeks for the company.
Paying a premium
Aphria was offered a premium of nearly 45% over its closing price of 7.6 Canadian dollars per share on December 27. The premium created enthusiasm among investors. The stock was battered in December due to negative comments from a short seller. To learn more, read Aphria Had One of Its Worst Days on December 3. With the cannabis sector (MJ) becoming one of the hottest sectors, it isn’t unusual to see interest from outside players in companies like Canopy Growth (WEED), Aurora Cannabis (ACB), and Cronos Group (CRON).
Green Growth Brands’ bid to acquire Aphria was hostile. The former approached shareholders directly. Green Growth Brands intends to buy out all of the common outstanding Aphria shares in exchange for 1.5714 common shares of Green Growth Brands. To learn more, read What a Hostile Takeover Bid from Green Growth Means for Aphria.
In a press release, Green Growth Brands mentioned that it “already has support for the Offer from Aphria shareholders holding approximately 10% of the outstanding Aphria Shares. Green Growth has additionally acquired a meaningful toehold position in Aphria.”
Next, we’ll discuss how Aphria responded to the development.