Aphria Inc (NYSE: APHA)(TSE: APHA) has become one of the black sheep of the cannabis sector. Ever since short-sellers brought forth accusations that the company was engaged in an elaborate, insider-driven scheme to funnel shareholder funds into almost worthless acquisitions owned by company executives, Aphria has been in a battle to maintain investor confidence and it’s public image. However, it turns out that one major cannabis company, Green Growth Brands (CSE: GGB), is willing to make Aphria an acquisition offer at a hefty stock premium.
Green Growth Brands said that Aphria shareholders would be offered a generous 45.5 percent premium on current share prices, receiving 1.56 GGB shares for each Aphria share – or around CA $11 per share. In comparison, today saw Aphria’s share price settle at $7.57.
“We believe our offer will create value for both Aphria and Green Growth shareholders. We are confident that the significant premium we are offering and the opportunity to participate in the growth of a stronger, combined company are so compelling that we are taking our offer directly to Aphria’s shareholders,” said Peter Horvath, Green Growth’s CEO. The announcement continued, highlighting that a merger between both firms would be a synergistic union greater than the sum of its parts, adding that “Together, we can unleash synergies between our teams, assets and geographies, forming a combined enterprise that will accelerate our collective growth strategies in Canada, the U.S. and overseas.”
Green Growth recently merged with another company, Xanthic Biopharma Inc, and is looking to further expand into North American markets. Aphria is one company that could potentially be undervalued should these short-seller accusations prove without validity.
In early December, Quintessential Capital Management and Hindenburg Research issued a 30-page report claiming that many of Aphria’s Latin and South American acquisitions were “largely worthless.” Gabriel Grego, analyst of QCM, argued that the company spent well over $700 million buying subsidiaries which had little tangible value save enriching insiders within the companies.
Hindenburg Research went on to comment on the Green Growth takeover, tweeting that “The one thing we know about this $GGB takeover attempt is that it is anything but hostile. $APHA management would gladly take any deal right now to get out of their mess.”
Green Growth Brands Company Profile
Green Growth brands expects to dominate the cannabis and CBD market with a portfolio of emotion-driven brands that people love. Led by renowned retailer Peter Horvath, the GGB team is full of retail renegades with decades of experience building successful brands. –Green Growth Brands
Aphria Inc Company Profile
Aphria is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible.
Focusing on untapped opportunities and backed by the latest technologies, Aphria is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly-researched consumer insights designed to meet the needs of every consumer segment.
Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than 10 countries across 5 continents. –Aphria