Curaleaf Holdings has formally launched its takeover bid for Aurora Cannabis, taking its acquisition proposal directly to Aurora shareholders after the two companies failed to reach an agreement through private discussions.
Under the offer announced today, August 18, Aurora shareholders would receive 0.3463 of a Curaleaf subordinate voting share plus $0.75 in cash for each Aurora share, representing total implied consideration of approximately $4 per share based on Curaleaf’s August 10 closing price. Curaleaf says that represents a 45% premium to Aurora’s 30-day volume-weighted average price as of August 10.
The offer will remain open until 5 p.m. Mountain Time on December 1 unless it is extended, changed or withdrawn. It is not subject to financing or due diligence conditions, although regulatory approvals and several other customary conditions must be satisfied.
Curaleaf first publicly announced its proposed acquisition earlier this month after saying Aurora’s board declined multiple attempts to discuss a potential transaction. Aurora subsequently formed a special committee to review the proposal.
Curaleaf Chairman and Chief Executive Officer Boris Jordan said the company is now putting the decision directly before Aurora shareholders.
“Today, we are putting this proposal directly in the hands of Aurora shareholders,” Jordan said. “We believe our Offer provides immediate value and a unique opportunity to participate in the upside of a larger, more diversified global cannabis platform.”
Curaleaf estimates that combining the companies could generate at least $40 million in annual cost savings through reductions and efficiencies involving corporate overhead, procurement, supply chains and international infrastructure. The company says a combined Curaleaf-Aurora operation would have more than $1.5 billion in trailing 12-month revenue and nearly $350 million in adjusted EBITDA.
The acquisition would also create a company with a pro forma market capitalization exceeding $3 billion, according to Curaleaf.
For the offer to proceed, more than 50% of Aurora shares held by independent shareholders must be tendered, along with at least two-thirds of outstanding shares on a fully diluted basis. The transaction also requires applicable governmental and regulatory approvals.
Aurora’s special committee has not yet issued a recommendation to shareholders on whether they should accept the offer.
