Green Growth's Hostile Pursuit Of Cannabis Producer Aphria Comes To An End

Green Growth Brands Inc GGBXF's purported interest in pot producer Aphria Inc APHA seems to have come to an end, with the former deciding not to pursue the latter following an unsuccessful tender offer.

Timeline Of The Takeover Saga

Dec. 27 – U.S. cannabis retailer Green Growth Brands, backed by the Ohio-based Schottenstein family, formally launched a tender offer for Aphria, valuing the latter at C$2.8 billion in stock, or C$11 per Aphria shares. Green Growth touted its offer price as representing a 45.5-percent premium to Aphria's Dec. 24 closing price. Stating that its engagement with Aphria's board did not yield the desired results, Green Growth said it's taking its offer directly to the shareholders.

Dec. 28 – Aphria responded by stating the share exchange ratio of 1.5714 Green Growth shares for each Aphria share valued its shares 23 percent below their 20-day volume weighted average price.

Jan. 22 – Green Growth made a second all-stock hostile bid for Aphria, valuing the latter at C$2.35 billion. The offer was supposed to remain open until May 9. Aphria advised its shareholders not to take any action until its board makes a formal recommendation. The exchange ratio remained the same at 1.5714 Green Growth shares for each Aphria share.

Feb. 6 – After considering the offer, Aphria's board unanimously recommended shareholders do not tender their shares and reject the offer, reasoning the offer values the company at a 23 percent discount and is a highly opportunistic one.

Feb. 7 – In response, Green Growth once again sang the virtues it sees in the proposed combination and urged shareholders to tender their shares.

April 15 – Green Growth agreed with Aphria regarding shortening of the expiry period of the tender offer to 5 p.m. Toronto time April 25, and made the regulatory filing for the same.

Unsuccessful Tender Offer

Following the expiry of the updated tender offer, Green Growth announced late Thursday it will not take up any Aphria shares as the conditions of the offer have not been met.

"All Aphria Shares that have been tendered to the Offer will be promptly returned to Aphria shareholders," the company added. Aphria stands to receive $89 million following the termination of the tender offer.

"We are pleased to have this resolved in a favorable manner," said Irwin Simon, CEO of Aphria. "We continue to move forward, creating long-term shareholder value by leveraging our production expansion, industrial scale cultivation and automation, brand positioning and our strategic global expansion initiatives that, as mentioned before, will be additionally supported by the $89.0 million in proceeds from the transaction."

Shares Volatile Through The M&A Interest

Aphria shares, which came under significant selling pressure early December in the wake of short seller reports, got a reprieve when the Green Growth offer was unveiled. The shares staged a recovery through the unfolding of the takeover drama. Since the beginning of April, they have come off their recent highs.

Aphria's stock traded around $7.68 per share Friday morning.

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