It appears that a hostile takeover is brewing for Hexo Corp (TSX: HEXO). A concerned shareholder, Adam Arviv, last night announced that he intends to nominate five new independent directors to helm the company as a means of “turning around the underachieving Company’s disappointing performance.”
Amongst the complaints levied by Arviv, is that prior management of the company, including Chair Dr Michael Munzar and founder Sebastian St-Louis, deceived the shareholders of Redecan, whom the company acquired last year. Arviv states that a number of financings conducted by the company were destructive in nature, and that the board “has demonstrated a notable lack of understanding of capital markets.”
Despite the ousting of St-Louis last fall, Arviv claims that this was not enough, and that much of the current board needs to be vacated as a result to “unlock the massive shareholder value that is trapped in Hexo.” He then went on to propose the appointment of himself, Mark Attanasio, Craig Bromell, Rob Godfrey, and Aidan Rasalingam to the board, all of whom are independent.
Expecting that shareholders will vote in his favor, Arviv then added that the new board would establish a special committee to “evaluate all paths to effecting a positive resolution for all stakeholders.”
Arviv currently owns a 2% stake in the company, via 6.77 million shares.
Hexo Corp last traded at $0.84 on the TSX.
Information for this briefing was found via Sedar and Hexo Corp. 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.
