TORONTO — Aphria Inc. says a hostile takeover bid presented to its board by Green Growth Brands is “quite risky” and significantly undervalues the company, which is one of the biggest players in Canada’s legal cannabis market.
Ohio-based Xanthic Biopharma Inc., which does business as Green Growth Brands, announced its hostile takeover bid for Aphria after stock markets closed Thursday.
Green Growth says its offer values the Ontario-based cannabis producer at $11 per share or $2.8 billion at the time of the announcement, but Aphria said Friday that estimate is based on a hypothetical, inflated value for Green Growth stock.
Aphria also says that Green Growth has attached a number of conditions to its offer, including Green Growth’s completion of a financing deal that values its shares at more than double their recent average price.
Shares of most publicly traded cannabis companies have been volatile over the last few months, including those of Aphria Inc. after its planned acquisition of LATAM Holdings Inc. came under fire in early December.
Aphria shares closed Thursday at $7.57 on the Toronto Stock Exchange, valuing the company at $1.89 billion before the hostile bid was announced. Their shares were up 17 per cent in pre-market trading Friday, valuing Aphria at $2.2 billion.
Xanthic shares closed at $4.98 on Thursday at the Canadian Stock Exchange, valuing the company at about $890 million.
Companies in this story: (TSX:APHA, CSE:GGB)
The Canadian Press