AURORA CANNABIS IN (OTCMKTS:ACBFF) continues to work in a big way with yet another major breakout, taking the stock to well above the $5/share level to close Thanksgiving week. That takes us to the start of the year-end race for performance. One of the main drivers for this stock may end up being about whether or not it’s able to close its somewhat hostile takeover bid for Cannimed.
The company closed the holiday week by announcing that, “further to its press release of November 17, 2017, it has formally commenced its offer to purchase all of the issued and outstanding common shares of CanniMed Therapeutics Inc. (TSX: CMED) for consideration consisting of common shares of Aurora.” The logic presented by the company is extensive and compelling, and a deal does look likely
AURORA CANNABIS (OTCMKTS:ACBFF) is a licensed producer of medical marijuana pursuant to the Marijuana for Medical Purposes Regulations and operates a 55,200 square foot expandable state-of-the-art production facility in Alberta, Canada.
ACBFF’s wholly-owned subsidiary, Australis Capital Inc., seeks to be an active participant in the U.S. Cannabis market. Aurora is trading on the Canadian Securities Exchange under the trading symbol “ACB”. The company is headquartered in Vancouver, Canada.
According to company’s materials, “Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island.
In addition, the Company holds approximately 9.6% of the issued shares (12.9% on a fully-diluted basis) in leading extraction technology company Radient Technologies Inc., based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1%. Furthermore, Aurora is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union (“EU”), based in Germany.”
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As noted above, this stock has been red hot in a defining way, but the company is still pressing on the strategic side, looking to close a major takeover. Management has presented a vision filled with potential synergies, appealing directly to CanniMed shareholders. And the narrative they have painted is compelling, to say the least.
“We are excited to be able to present this offer to CanniMed’s shareholders. We are confident that they will find the significant premium we are offering on CanniMed’s shares is highly attractive, and is amplified by the opportunity to participate in the growth of the combined company through Aurora’s common shares,” said Terry Booth, CEO of Aurora. “Our ability to unlock value is one of the driving forces behind our offer, as we believe that we will be able to accelerate CanniMed’s growth more effectively than current management, and so we invite and encourage CanniMed’s shareholders to tender their shares to the bid.”
“The initial decision of CanniMed not to explore our proposal was unfortunate.” said Ronan Levy, Aurora’s Vice President of Business and Corporate Affairs. “However, we are hopeful that CanniMed’s Special Committee will see, as we do, that the financial and strategic rationales for a combination with Aurora are compelling, and that the transaction is in the best interests of CanniMed’s shareholders. We remain available for productive conversations with the Special Committee such that the benefits of the combination can begin to be realized by the shareholders of both of our companies as soon as possible.”
At this time, carrying a capital value in the market of $2103.1M, ACBFF has a significant war chest ($127.9M) of cash on the books, which stands against virtually no total current liabilities. ACBFF is pulling in trailing 12-month revenues of $23.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 168.6%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $ACBFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ACBFF, either long or short, and we have not been compensated for this article.