Curaleaf plans to raise its hostile offer for Aurora Cannabis, Chairman and CEO Boris Jordan said Wednesday, a day after Aurora agreed to be acquired by rival Organigram Global.
Asked how Curaleaf would respond to the Organigram deal, Jordan told analysts on the company’s third-quarter earnings call that Curaleaf is “going to improve our bid substantially.” He did not give a price, and said Curaleaf will not raise its offer materially without due diligence access, which he called an absolute condition, and that Curaleaf has not seen Organigram’s circular or full terms. He put Organigram’s bid at just under 10% better than Curaleaf’s at the latest close and said Organigram’s financing is contingent.
Organigram agreed Tuesday to buy Aurora foor C$7.80 a share, about C$561 million, in cash and stock. That price sits 21% above the implied value of Curaleaf’s offer at Monday’s close.
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British American Tobacco, which already holds a large Organigram stake, plans a C$187.5 million investment to help pay the cash component. Aurora’s board voted unanimously for the deal, which should close in January if shareholders, regulators and a court approve it.
Aurora shares rose about 20% and Organigram fell about 5% after the announcement.
Curaleaf launched its hostile campaign in August at an implied US$4 a share and raised the offer about 25% on October 6. Aurora’s board rejected both offers unanimously, saying they undervalue the company. Curaleaf says its bid remains open and expires December 4, and it accuses the board of giving Organigram due diligence access while denying the same to Curaleaf.
Related: Curaleaf Wants Alberta Regulator to Freeze Aurora Share Sales
Jordan played down the stakes, describing Aurora as a bonus rather than a necessity for Curaleaf. Curaleaf reported record third-quarter revenue of US$353 million, up 11% from a year earlier.
