Aurora Cannabis (TSX: ACB) is challenging the foundation of Curaleaf Holdings’ (TSX: CURA) hostile takeover bid, arguing that the offer relies on what it calls “inaccurate” claims and does not properly reflect the value of Aurora’s international medical cannabis business.
Aurora urged shareholders to take no action while its special committee reviews Curaleaf’s offer, which values Aurora shares at about US$4.00 each through a combination of Curaleaf stock and cash. The proposal includes a US$5.00 maximum value per Aurora share, a condition Aurora has repeatedly highlighted as a limitation on potential upside.
The dispute now centers on whether Curaleaf is acquiring a struggling cannabis producer at a premium or attempting to buy a specialized global medical cannabis platform before its international expansion is fully reflected in its valuation.
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Curaleaf has promoted the transaction as a way to combine Aurora’s EU-GMP-certified cultivation capacity with Curaleaf’s international distribution network. The company has estimated the combined business would generate more than US$1.5 billion in trailing revenue and approximately US$350 million in adjusted EBITDA, alongside at least US$40 million in annual cost synergies.
Aurora said the inaccurate claims include Curaleaf’s characterization of German medical cannabis reimbursement changes as a major threat to its business. It argued that the affected reimbursement segment represented less than 10% of its German sales volume before the changes and does not reflect the broader performance of its European medical cannabis operations.
In its latest quarterly results, Aurora reported international medical cannabis revenue increased 17% year over year to $43.3 million, driven primarily by Germany.
However, Aurora’s overall financial performance remains mixed. Total revenue declined 9% year over year to $67.6 million, while adjusted EBITDA fell to $3.4 million from $10.8 million in the prior-year period.
The cannabis firm also disputed Curaleaf’s statements regarding its cultivation operations, calling claims about its growing methods and output per square foot “inaccurate and outdated.” The company said those assessments overlook its EU-GMP-certified facilities and specialized cultivation capabilities.
Aurora further pushed back against Curaleaf’s broader portrayal of the company as facing declining prospects, pointing to growth in international medical cannabis revenue and its expansion strategy across global markets. The company said Curaleaf’s arguments do not fully reflect the value of Aurora’s assets and future growth opportunities.
The companies also disagree over the negotiation timeline before Curaleaf went directly to shareholders. Curaleaf said it made multiple attempts to engage Aurora’s board, while Aurora said discussions continued into August and that Curaleaf’s public proposal did not reflect those conversations.
Curaleaf closed Tuesday at $12.80 on the TSX, while Aurora closed at $5.10.
