A U.S. cannabis company has made a bid to acquire Aurora Cannabis Inc., prompting Aurora to establish a special committee to review the offer. Curaleaf Holdings Inc. disclosed their intention to purchase all shares of the Edmonton-based company, aiming to create a combined entity operating in 17 countries worldwide. Despite attempts to negotiate privately, Curaleaf decided to publicly announce their proposal after Aurora’s board declined to engage in discussions following the submission of formal letters on June 23 and July 7.
Curaleaf proposed paying Aurora shareholders $4 US per share along with an additional $0.75 US cash for each Aurora share. In response, Aurora acknowledged receiving the letters but refuted claims of refusing to consider the offer. The Canadian firm clarified that there was ongoing correspondence between their lead independent director and Curaleaf’s CEO until July 24.
Aurora plans to convene a special committee of independent directors to evaluate the bid’s merits and potential benefits for stakeholders. However, they cautioned that a deal is not guaranteed, and business operations will continue as usual in the interim. Analysts from TD Cowen expressed reservations about the offer, stating that it undervalues Aurora’s long-term prospects given its market leadership in medical cannabis and strong financial position.
Curaleaf emphasized the strategic advantages of merging with Aurora, highlighting the potential synergies between their global distribution network and Aurora’s expertise in medical cannabis production. The combined revenue of both companies exceeded $1.5 billion US in the past year, with Curaleaf projecting annual cost savings of $40 million US post-acquisition. Curaleaf’s CEO, Boris Jordan, believes the proposed merger would benefit shareholders by providing access to a broader global market and regulatory opportunities in the U.S.