Curaleaf Holdings has increased its takeover offer for Aurora Cannabis by 25%, raising the implied consideration to US$5 per Aurora share as it continues its push to acquire the Canadian cannabis company.
Curaleaf announced the enhanced offer Monday, saying Aurora shareholders would receive 0.4013 Curaleaf shares plus US$1 in cash for each Aurora share. The valuation is based on Curaleaf’s October 2 closing share price of C$14.21.
The cash portion of the offer is up 33% from Curaleaf’s previous proposal and would account for about 20% of the total consideration.
Based on Aurora’s 30-day volume-weighted average price of US$2.75 as of August 10, the day before Curaleaf announced its intention to pursue the acquisition, the company says the revised US$5 offer represents an 86% premium.
Curaleaf is also raising the maximum value shareholders could receive under the offer from US$5 to US$6 per Aurora share. According to the company, the new cap represents a 118% premium to Aurora’s August 10 unaffected share price.
Curaleaf Chairman and CEO Boris Jordan said the company increased its offer after discussions with Aurora shareholders.
“This increased offer reflects careful consideration and shareholder input, demonstrating our continued commitment to reaching a successful outcome,” Jordan said.
Curaleaf said it developed the revised proposal using only publicly available information, claiming Aurora has continued to decline its requests for customary due diligence access.
“We are enhancing our proposal despite Aurora’s refusal to engage and provide access to customary due diligence,” Jordan said. “We view this as a significant good-faith step that demonstrates our conviction in the merits of a combination and the value creation opportunity it represents.”
Under Curaleaf’s projections, a combination of the two companies would create a cannabis business operating across 17 countries with more than US$1.5 billion in last-12-month revenue and nearly US$350 million in adjusted EBITDA.
Curaleaf also projects at least US$40 million in annual cost savings from the combination and says the resulting company would have a pro forma market capitalization exceeding US$3 billion.
Aurora shareholders would retain exposure to the company’s international medical cannabis business while gaining an ownership stake in Curaleaf’s U.S. operations.
Curaleaf plans to file a Notice of Variation, Change and Extension reflecting the revised terms with Canadian securities regulators, along with a new registration statement with the U.S. Securities and Exchange Commission.
The company is also extending the expiration of the takeover offer. The previous deadline of 5 p.m. Mountain Time on December 1 will be replaced with a deadline of 11:59 p.m. Mountain Time on December 4.
Curaleaf said the amended filing will include pro forma financial statements requested by Aurora as the two companies continue their dispute over the proposed acquisition.
