Aurora Tries To Convince CanniMed Shareholders That They Are The Best Company, Like, Ever
In a series of moves beginning just before the new year, Aurora Cannabis Inc. (TSX:ACB) continued its quest to consume CanniMed Therapeutics Inc. (TSX:CMED). Following last week’s split decision by the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission on a host of issues concerning the two companies, Aurora pressed on with their plans to purchase their rival, making plays in the open market and the press. News of Aurora’s actions comes on the heels of CanniMed’s announcement of a deal with Up Cannabis Inc., a wholly-owned subsidiary of Newstrike Resources Ltd. (TSX-V:HIP) earlier today, a move on their part to sway shareholders away from Aurora’s grasp.
In a statement released in late December, just before the New Year holiday, Aurora announced the purchase of 450,000 common shares of CanniMed stock at a price of $22.75 per share. One day previous, regulators ruled CanniMed’s shareholder rights plan, known as the poison pill, invalid while also rejecting a request to deny Aurora the right to purchase shares of CanniMed on the open market. Conversely, the ruling did state that Aurora’s request to shorten the minimum deposit period from 105 days to 35 days was denied.
“The great news today is that CanniMed shareholders are now freed from CanniMed management’s efforts to take away their fundamental right to support the superior opportunity,” Aurora CEO Terry Booth said in a statement at the time of the ruling.
Five days later, on January 2, Aurora released a statement announcing that the company purchased an additional 116,000 shares of CanniMed, this time at a price of $24.00 per share. In total, Aurora now holds 566,000 shares of CanniMed stock.
Throughout the saga, however, Aurora and CanniMed have battled in the press as much as they have in the boardroom. On Tuesday, Aurora spent the day enticing CanniMed shareholders with a double-shot of announcements that presented the company as a unique value-add. First up was a deal with Namaste Technologies Inc. (CSE:N) wherein they announced that Aurora subsidiary CanvasRx Inc. would receive their own version of NamasteMD.com, Namaste’s patient acquisition tool. In return, Namaste accepted 500,000 stock options at $3.35 per share.
The typical press release back-slapping took on new meaning in light of the CanniMed situation, as Namaste President and CEO Sean Dollinger stated, "We are thrilled to have Aurora, the industry's most innovative and dynamic Licensed Producer, as our preferred strategic partner...We are very proud to be aligned with Aurora's team, and look forward to executing on our ongoing collaboration."
Aurora stepped up the effort with a second announcement on Tuesday presenting an operational update to their shareholders. Of note throughout all of the self-praise was the statement that Aurora has liquid assets over $500 million.
It was a stark contrast to Aurora’s less-than-kind assessment of Newstrike Resources, presented to CanniMed shareholders recently. In a statement released by the company last week, Aurora said of the deal, “The proposed Cannimed-Newstrike transaction is a bad deal that will destroy considerable value for CanniMed’s shareholders. It would give away 35 percent of CanniMed to shareholders of a company with no cash, zero revenues, uncompleted and unfunded facilities that CanniMed would have to use its own cash reserves to build out.”
CanniMed shareholders are set to vote on the Newstrike deal on January 19. Until then, the war of words will continue in the press.