Aurora Cannabis Inc. (TSX:ACB) stock was up 3.55% in early afternoon trading on January 19. CanniMed Therapeutics Inc. (TSX:CMED) announced on Thursday that it would postpone a shareholders meeting to vote on the proposed acquisition of Newstrike Resources Ltd. CanniMed will hold discussions with Aurora over the next few days to determine a course forward. This comes just days after it was reported that CanniMed was launching a $725 million lawsuit against Aurora and others, alleging a shareholder conspiracy.
Aurora launched a takeover bid for CanniMed in November for an all-stock offer of $24 per share. As of early afternoon trading today, CanniMed stock was trading at $35 per share. It is certain that Aurora will be forced to go above and beyond its $24 offer in order to make any headway.
Originally Aurora had stipulated that it will drop its takeover bid if CanniMed shareholders vote in favour of the Newstrike acquisition. Three top shareholders at CanniMed that represent 36% of outstanding shares have thrown their weight behind Aurora’s bid. However, new reports indicate that Aurora has submitted an overture that will allow the acquisition of Newstrike.
Aurora stock has climbed 39.9% to start 2018 and if it manages to entice CanniMed leadership with its new offer it will acquire a company with the longest production record in the business. It will also bolster Aurora’s footprint in products like cannabis oils. Investors should be watching talks closely over the weekend as Aurora seeks to strengthen its position as a top producer in Canada ahead of legalization.
