Green Growth Makes a Formal Offer for Aphria

Official offer

On January 23, Green Growth Brands was back in the news. The company filed a formal offer to acquire all of Aphria’s (APHA) common outstanding shares. In return, Aphria shareholders will receive 1.5714 shares of Green Growth’s share per Aphria’s share. Green Growth closed at nearly $5.8 per share on January 23, which would give a valuation of ~$9 per Aphria share.

Green Growth Makes a Formal Offer for Aphria

Aphria shares closed almost 2.3% lower at $6.9 on January 23, which would mean a premium of nearly 30% if Green Growth’s offer is considered. The ETFMG Alternative Harvest ETF (MJ) fell 1.2% during the day.

Background

On December 27, Green Growth Brands, the business name of Xanthic Biopharma, announced its bid to take over Aphria. Back then, the deal was valued at $2.1 billion. Green Growth’s attempt was dubbed as a “hostile” takeover. Green Growth took the offer to acquire the company directly to Aphria shareholders. To learn more, read What a Hostile Takeover Bid from Green Growth Means for Aphria.

Aphria is one of the largest cannabis companies among players including Canopy Growth (WEED), Tilray (TLRY), and Cronos Group (CRON). The company also has a large cannabis-growing capacity in Canada. By acquiring Aphria, Green Growth plans to quickly scale up its presence in the cannabis sector in Canada and the US. To learn more, read Hindenburg Research Slams the Latest Takeover Bid for Aphria.

Next, we’ll discuss how Aphria responded to Green Growth’s offer.