CanniMed Issues Letter to its Shareholders Against Aurora Takeover
Saskatchewan-based CanniMed Therapeutics (TSX:CMED) released a letter to its shareholders urging them to vote in support of the purchase of Newstrike Resources and against the takeover effort by Aurora Cannabis.
The Cannimed letter made the following, among many, arguments:
- Aurora’s hostile bid, capped at $24/share, is holding CanniMed’s share price back.
- Aurora is offering inflated shares to purchase Cannimed. These shares will eventually decline and leave shareholders with less value.
- The actions of Aurora insiders indicate they believe their share price is unsustainable (they sold $17 million in shares before making takeover offer).
- Aurora executives have stated on record that they think Cannimed shares are undervalued.
- Cannimed’s purchase of Newstrike will create greater shareholder value, by merging their complementary strengths.
- CanniMed is positioned with its oils capability to generate over $1 billion in annual revenue and 70+% profit margins. Cannimed leaders believe oils and oil derivatives will comprise 50+% of the Canadian and global markets, and that CanniMed’s operating results will lead the industry. The combined planned grow capacity of CanniMed and Newstrike of 45,000 kg will put it among the sector leaders.
- The Newstrike acquisition is accretive. Aurora’s offer is dilutive.
To read the full text of the letter, visit the link below.
CanniMed Issues Letter to its Shareholders Against Aurora Takeover
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