North America's weed war isn't over.
Canada's biggest marijuana producer, Aurora Cannabis, urged its shareholders last week to reject the sweetened takeover offer from its American counterpart, Curaleaf Holding. On Oct. 5, the U.S. firm had boosted its hostile bid from $4 a share to $5 in cash and stock.
"Curaleaf's revised offer still does not reflect the value of the company Aurora shareholders own today," said Aurora CEO Miguel Martin, in last week's press release. The Canadian company's New York Stock Exchange-listed stock closed at $3.96 on Monday.
Curaleaf is the largest of the state-licensed U.S. cannabis producers that caught the imagination of investors five years ago. It approached Aurora in June about a friendly merger, after the Canadian firm's shares had fallen below $2.60 -- from a peak that was 99-times higher in 2018, when Canada's cannabis legalization set Canadian weed stocks on fire.
Cannabis stocks collapsed on both sides of the 49th parallel, when sales growth slowed and U.S. federal legalization proved slow in coming.
After Aurora's board rejected Curaleaf's friendly overture, the U.S. firm launched a hostile bid in August.
In a Monday pitch to Aurora investors, Curaleaf said that the Canadian has entered into confidentiality and standstill agreements with other parties who have been examining Aurora's business, while Aurora excludes Curaleaf from the same due diligence.
"Aurora's Board has a fiduciary duty to shareholders, which requires it not to take illogical steps to keep the highest bidder out of the room," said Curaleaf CEO Boris Jordan.
"These are not the actions of a company that is serious about maximizing value for shareholders," said Curaleaf.
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