Aurora Ups War of Words, Calls CanniMed-Newstrike Deal “Wholly Inadequate”

The latest chapter in the battle between Aurora Cannabis Inc. (TSX:ACB) and CanniMed Therapeutics Inc. (TSX:CMED) occurred on Monday when Aurora announced the filing of a dissident circular in opposition to CanniMed's acquisition of Newstrike Resources Ltd. (CVE:HIP) Aurora plans to solicit votes against the deal, a move made public in a release this morning. CanniMed previously announced their intentions to hold a vote on January 23. If it passes, Newstrike shareholders will receive .033 shares of CanniMed per unit of Newstrike.

In an early morning statement, Aurora upped the war of words. A company analysis of the Newstrike deal claims it is a poor value for CanniMed shareholders. Aurora states that Newstrike lacks revenue and patients and that a massive part of the company needs funding. They also argue that the CanniMed deal is Newstrike’s “last lifeline." Newstrike cannot meet their current financial obligations, according to the release.

“We reviewed all disclosed and public information on Newstrike and on CanniMed management’s proposed acquisition, and in our opinion it’s a terrible deal for CanniMed shareholders,” said Aurora CEO Terry Booth in the statement. “It doesn’t take a genius to see that a company with no revenues, no sales license, no patients, no intellectual property of significant value, no track record, and not enough funds to continue operating and funding its own expansion, should not be worth giving 35% of CanniMed away to Newstrike shareholders.”

Tensions between the two companies began in late November when CanniMed rejected Aurora’s original merger offer. The move set in motion a hostile-takeover of the Canadian cannabis company, which in turn sent CanniMed fending for their lives. CanniMed enacted a shareholder rights plan to halt further action from Aurora, resulting in the continued mudslinging ever since. Complicating the whole matter, CanniMed announced their acquisition of Newstrike Resources Ltd. for CAD $248 million.

Included in Aurora’s oppositional statement was news that the company hired financial advisor PI Financial to assess the Newstrike deal. PI Financial will include a statement in the dissident circular calling the deal “wholly inadequate.”

“We therefore ask CanniMed shareholders to vote against the issuance proposal, and accept our offer, which not only pays a very significant premium, but also offers the opportunity to continue participating in the growth of the cannabis industry as part of Aurora, the most dynamic company in the sector,” concluded Booth.

So are the Days of Our Lives…

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