Zenabis Global (TSX: ZENA) this morning indicated that two independent proxy advisors have recommended that shareholders approve the proposed merger with that of Hexo Corp (TSX: HEXO) (NYSE: HEXO).
Both Institutional Shareholders Services and Glass Lewis have provided the recommendation that shareholders approve of the amalgamation between the two Canadian cannabis operators at the upcoming meeting. The former indicated that the merger made “strategic sense”, while the latter stated that the arrangement has “sound rationale.”
ISS indicated that it believes the transaction would provide Zenabis shareholders to “continue participating in the upside potential represented by the Canadian cannabis market through an entity with enhanced operating leverage and scale.” Glass Lewis meanwhile indicated that the transaction would provide Zenabis shareholders with a stronger balance sheet than Zenabis currently exhibits, which would be an improvement from the status quo.
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Under the arrangement, Hexo is set to acquire Zenabis at a rate of 0.01772 Hexo shares for every share of Zenabis. The transaction remains subject to shareholder approval, with Zenabis shareholders voting on the transaction May 13. At the time of announcement, the transaction represented a premium of 16.32%.
Zenabis Global last traded at $0.125 on the TSX.
Information for this briefing was found via Sedar and Zenabis Global. 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.
