Curaleaf Holdings (CURLF) raised its hostile takeover offer for Canadian peer Aurora Cannabis (ACB) to $5 per share from $4, intensifying a months-long bidding battle that has yet to win the support of Aurora’s board.
The enhanced proposal will see Aurora shareholders receive 0.4013 Curaleaf shares plus $1 in cash for each share held, valuing the offer at $5 based on Curaleaf’s October 2 closing price. The premium represents an 86% jump over Aurora’s unaffected share price — its 30-day volume-weighted average price of $2.75 as of August 10. Curaleaf also lifted the maximum consideration, or Cap Price, to $6 per share from $5, a 118% premium to the unaffected price and a 295% premium on an ex-cash basis.
Stamford, Connecticut-based Curaleaf first launched its offer in August at $4 per share, comprising 0.3463 subordinate voting shares plus 75 cents in cash, anchored to its August 10 closing price. Aurora’s board rejected the approach in September, saying the bid materially undervalues the company and seeks to acquire its cash, EU-GMP assets, global growth platform and future upside at a discount, and does not serve shareholders’ best interests.
Curaleaf is pressing ahead despite the impasse. Boris Jordan, chairman and chief executive officer, said the company has met with a significant portion of Aurora’s shareholder base over recent weeks, all of whom support the strategic rationale for a combination. Jordan described the increased offer as a careful consideration incorporating shareholder input that underscores Curaleaf’s continued commitment to reaching a successful outcome, and said sweetening the bid even without Aurora’s cooperation or access to customary due diligence was a significant good-faith step reflecting conviction in the value creation a merger would bring.
The two companies’ dispute has escalated in recent months. Curaleaf filed an application with the Alberta Securities Commission to halt Aurora’s at-the-money (ATM) equity financing plan, arguing that selling new shares below Curaleaf’s offer price destroys shareholder value. Aurora countered that the ATM program predates the offer and is deployed only when its board judges it to be beneficial to shareholders, citing its acquisition of Safari Flower Company as evidence of its ability to build long-term value.
Shares of Aurora, listed on the Nasdaq, rose following the announcement. Whether a deal ultimately materializes hinges on Curaleaf’s ability to win over a majority of Aurora’s shareholders, while the deepening animosity between the two sides clouds the integration prospects should a combination proceed.
