Green Growth makes formal bid for Aphria

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The plan first announced in December is moving forward

In December, Ohio-based Green Growth proposed a hostile takeover of Canadian cannabis producer Aphria. It now appears that the proposal was more than just talk, as Green Growth has confirmed that it is launching a formal bid today. The offer is expected to remain open until May 9.

Green Growth CEO Peter Horvath explained in a statement, “We are pleased to officially launch our bid for Aphria. This is an exciting opportunity for shareholders of both Green Growth and Aphria to build value and create the preeminent cannabis operator in North America.”

He added, “The combination of Aphria’s Canadian supply and wholesale agreements with Green Growth’s vertically integrated operations and rapidly growing retail footprint in the United States best positions us to capitalize on the massive growth opportunities in North America and beyond. I encourage Aphria shareholders to tender their shares to our offer.”

As part of the deal, Aphria shareholders will receive 1.5714 common shares in Green Growth for each share they own in Aphria. This coincides with what the company initially stated when it announced its takeover proposal last month.

Aphria scoffed at the proposal in December. It said that the bid – which Green Growth valued at $2.1 billion – was “significantly” lower than what the company was worth.

All Js Greenspace, a Green Growth investor, has agreed to purchase $112.32 million in Green Growth shares in conjunction with the takeover, according to Green Growth. The purchase is designed to act as a type of “backstop” to the company’s goal to have $224.64 million in equity financing backing the takeover.

Green Growth proposed the hostile takeover after two short-sellers, Hindenburg Research and Quintessential Capital, claimed Aphria had overpaid for worthless properties and had also manipulated the deals to put more money in the pockets of the individuals involved in making the deals happen. Aphria denied the allegations, but the company’s then-CEO, Vic Neufeld, subsequently resigned. Aphria asserted that the resignation was not related to the accusations.

Aphria, which is traded on the NYSE under the ticker symbol APHA, is trading up 0.42% in the past 24 hours as of this writing. Its price sits at $7.13.