It’s been reported by BNN Bloomberg that Aphria Inc (TSX: APHA) (NASDAQ: APHA) and Aurora Cannabis (TSX: ACB) (NYSE: ACB) recently explored the topic of a merger, whereby Aphria would become the majority holder of the resulting issuer. The report from Bloomberg comes weeks after Twitter user @BettingBruiser originally reported on the matter.
Unsurprising to investors in Canadian potstocks, BNN has reported that discussions broke down not because of perceived value to shareholders, but rather over the topic of executive compensation along with board composition. Discussions for the merger reportedly took place over the course of several weeks before finally breaking down last week. It’s unclear if discussions are continuing between the two firms at this time.
Prior to the breakdown of merger discussions, Aphria was said to be the majority holder in the resulting issuer, with current shareholders set to receive 51% of the resulting company while Aurora shareholders would own 49%. Given this fact, current Aphria CEO Irwin Simon is said to have been the selected head of the resulting issuer. Compensation to shareholders was planned to be provided via a share swap, rather than that of an all cash transaction, however the exchange rate was not disclosed.
If the transaction were to have closed, the resulting issuer would have been valued at roughly $3.5 billion while representing approximately 30% of all recreational cannabis sales in the country. $200 million in costing synergies were said to have already been found between the two issuers, while having combined annual revenue in excess of $800 million.
Information for this briefing was found via BNN Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.