Aurora Cannabis investors appear overwhelmingly opposed to Curaleaf’s hostile takeover bid, while Curaleaf investors are considerably more supportive of the proposed combination, according to an informal poll conducted by The Marijuana Herald.
The Marijuana Herald asked investors, “Do you support Curaleaf Holdings, Inc.’s takeover of Aurora Cannabis Inc.?”
For the poll, we used the first 50 responses from people who identified themselves as Curaleaf investors and the first 50 responses from those who identified themselves as Aurora investors (100 total). Respondents who identified themselves as investors in both companies were not included in the poll.
Among self-identified Aurora investors polled, 90% opposed Curaleaf’s current offer, 6% supported the takeover and 4% were undecided.
Among self-identified Curaleaf investors, 64% supported the proposed acquisition, 24% opposed it and 12% were undecided.
The poll is informal and not scientific, and The Marijuana Herald did not independently verify respondents’ ownership of shares in either company.
Self-Identified Aurora Investors: 90% Oppose Current Deal
Opposition among self-identified Aurora investors centered overwhelmingly on the price Curaleaf is offering.
Curaleaf formally launched its takeover bid on August 18, offering Aurora shareholders an implied US$4 per share, consisting of 0.3463 Curaleaf subordinate voting shares and $0.75 in cash. Curaleaf says the offer represents a 45% premium to Aurora’s 30-day volume-weighted average price before the proposal became public.
Many self-identified Aurora investors who responded to the poll argued that the offer substantially undervalues the company’s international medical marijuana operations, debt-free balance sheet and EU-GMP-certified cultivation infrastructure.
Several respondents said they would consider a sale at a higher price, meaning opposition to the current offer did not necessarily amount to opposition to any Curaleaf-Aurora combination.
Aurora itself has made a similar argument, saying Curaleaf is attempting to acquire its global medical marijuana infrastructure “at the lowest price possible.” The company has advised shareholders to take no action while its board and independent special committee review the offer.
Self-Identified Curaleaf Investors More Supportive, But Concerns Remain
Sentiment among Curaleaf investors leaned in the opposite direction.
Nearly two-thirds of self-identified Curaleaf investors polled supported acquiring Aurora, with many pointing to the potential strategic benefits of combining the two companies.
Curaleaf argues that combining its international distribution network with Aurora’s medical marijuana operations and European cultivation infrastructure would create a company operating across 17 countries, with more than $1.5 billion in annual revenue and nearly $350 million in adjusted EBITDA. The company also projects at least $40 million in annual cost savings.
But those polled were far from unanimous.
Those opposing or questioning the transaction raised concerns about issuing additional Curaleaf shares, the company’s existing leverage and whether Aurora is worth increasing the offer to a level its shareholders might accept.
Taken together, the poll suggests Curaleaf’s biggest obstacle may not be convincing its own investors that Aurora is worth acquiring. It may be convincing Aurora shareholders that the company is offering enough.
