Sundial Growers (NASDAQ: SNDL) this morning was looking to bolster support for its previously announced acquisition of Alcanna Inc (TSX: CLIQ). The firm attempted to calm investors via the positive reinforcement of an independent proxy advisory firm, as well as highlighting the premium shareholders will receive upon closing.
At the time of original announcement, it was indicated that the acquisition of Alcanna would be an all-share transaction, with investors to receive 10.69 common shares of Sundial for each share of Alcanna held. Originally, this amounted to a 39% premium to the closing price of Alcanna. That premium however has now dropped to just 11%.
In attempting to quell investor concerns related to the fallout in Sundial share price since the original announcement of the transaction, the firm highlighted that a premium still exists (without acknowledging that the price of Alcanna is no-doubt tied to that of Sundial at this point in time plus a slight risk premium), while also indicating “it would take approximately 3 days of liquidity for holders of Alcanna Shares to dispose of all Sundial Shares received,” – an odd figure to provide as a reason to justify approval of a transaction.
The firm also commented that Institutional Shareholder Services recommended that shareholders of Alcanna vote in favour of the transaction. ISS is a reportedly independent proxy advisory firm.
Sundial Growers last traded at $0.60 on the Nasdaq.
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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.