CanniMed's Board and Special Committee Support
Aurora's Offer of Shares and Cash
TSX: ACB
TSX: CMED
EDMONTON and SASKATOON, Jan. 24,
2018 /CNW/ - Aurora Cannabis Inc. ("Aurora") (TSX:
ACB) (OTCQB: ACBFF) (Frankfurt:
21P; WKN: A1C4WM) and CanniMed Therapeutics Inc.
("CanniMed") (TSX: CMED) announce today that they have
entered into a support agreement (the "Support Agreement") whereby
the Board of Directors and the Special Committee of the CanniMed
Board have agreed to support a new offer made by Aurora for the
acquisition of all of the issued and outstanding shares of CanniMed
not owned by Aurora. In addition to the Board and Special
Committee, the new offer ("New Offer"), as described below, will
continue to be supported by certain CanniMed shareholders (the
"Locked-up Shareholders") representing 36% of CanniMed's
outstanding shares and by Brent
Zettl, President and CEO of CanniMed.
Key Transaction Highlights
Under the New Offer, CanniMed shareholders may receive in
respect of each CanniMed share, 3.40 Aurora shares or a combination
of cash and shares at the election of each CanniMed Shareholder,
subject to pro-ration with the maximum aggregate cash consideration
of $140 million. Based on an implied
Aurora share price of $12.65 and the
3.40 exchange ratio, the New Offer would equate to
$43.00, representing a 181% premium
over the closing price of CanniMed Shares on November 14, 2017, the last day prior to the
public disclosure of Aurora's intention to pursue a combination
with CanniMed, and a 79% increase to the previous offer Cap Price
of $24.00.
The total consideration for CanniMed under the New Offer is
approximately $1.1 billion based on
Aurora's implied share price of $12.65. The maximum amount of cash available
under the amended offer will be $140
million, and the number of Aurora shares to be issued will
be between approximately 72 million (assuming full cash elections)
and 84 million (assuming full share elections and no cash
elections). Assuming maximum cash elections, each CanniMed
shareholder would receive $5.70 in
cash and 2.9493 Aurora shares.
Support Agreement
The Support Agreement provides that CanniMed will support the
New Offer and will recommend to its shareholders in an amended
directors circular that CanniMed Shareholders will tender to the
Aurora New Offer. In addition to the foregoing, Aurora will receive
customary non-solicitation protection and a right to match any
competing proposal made to CanniMed and a break fee payable to
Aurora in certain circumstances, together with customary
representations and warranties. In addition to the Locked-up
Shareholders certain CanniMed shareholders representing
approximately 15% of the issued shares of CanniMed, including
Brent Zettl, Chief Executive
Officer, have agreed to support the New Offer.
The New Offer and the transaction are subject to customary
closing conditions, including Canadian Competition Act
approval.
Termination of Newstrike Arrangement Agreement
In connection with the New Offer, CanniMed has entered into a
termination agreement with Newstrike Resources Ltd. ("Newstrike"),
terminating the arrangement agreement between Newstrike and
CanniMed, resulting in the payment of a $9.5
million break fee paid to Newstrike. As a result, the
CanniMed shareholder meeting originally scheduled for January 23, 2018 and adjourned to January 25, 2018 has been cancelled.
Management Commentary
"We are very pleased to have come to terms with CanniMed on this
powerful strategic combination that will establish a best-in-class
cannabis company with operations across Canada and around the world," said
Terry Booth, CEO of Aurora. "Market
recognition of Aurora`s continued performance and strategy
execution since we first announced our intention to acquire
CanniMed allows us to share that benefit directly with CanniMed
shareholders by increasing the offer price, as well as by offering
a cash component. The amended offer includes value certainty and
represents a full, compelling and immediate 75% premium over
CanniMed's 20-day average price ending January 17, 2018, the day prior to CanniMed and
Aurora disclosing they were in discussions. Aurora now invites
CanniMed shareholders to share in Aurora's ongoing growth, as we
continue to create superior shareholder value, by joining with the
CanniMed Board of Directors and tendering their shares to our
amended offer."
Brent Zettl, President and CEO of
CanniMed, added, "A testament to the great team at CanniMed, this
transaction clearly confirms that the Company has been highly
successful in becoming a preeminent global leader in the medical
cannabis industry. In this leadership position, CanniMed has
provided invaluable education, resources, support and relief of
symptoms for thousands of patients served around the globe."
"This is an excellent outcome for both Aurora's and CanniMed's
shareholders after a hard-fought and diligently negotiated
process," said Cam Battley, Aurora's
Chief Corporate Officer. "We now look forward to warmly welcoming
CanniMed's employees and forging one unified team. Together, under
the Aurora banner we'll continue to invest in domestic and
international growth, and continue executing on our strategy of
building the most dynamic, innovative integrated cannabis company
in the world."
Advisors
Canaccord Genuity Corp. is acting as financial advisor to
Aurora, McMillian LLP is acting as legal advisor and Laurel Hill
LLP is acting as strategic shareholder advisor. Kingsdale
Advisors is acting as strategic shareholder and communications
advisor to CanniMed, AltaCorp Capital Inc. is acting as
financial advisor to the board of CanniMed and Borden Ladner
Gervais LLP is acting as legal advisor to the board of
CanniMed. Cormark Securities Inc. is acting as financial
advisor to the Special Committee of CanniMed and Stikeman
Elliott LLP is acting as legal advisor to the Special
Committee.
About Aurora
Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises
Inc., is a licensed producer of medical cannabis pursuant to Health
Canada's Access to Cannabis for Medical Purposes Regulations
("ACMPR"). The Company operates a 55,200 square foot,
state-of-the-art production facility in Mountain View County,
Alberta, known as "Aurora
Mountain", a second 40,000 square foot high-technology production
facility known as "Aurora Vie" in Pointe-Claire, Quebec on Montreal's West Island, and is currently
constructing an 800,000 square foot production facility, known as
"Aurora Sky", at the Edmonton
International Airport, as well as is completing a fourth facility
in Lachute, Quebec through its
wholly owned subsidiary Aurora Larssen Projects Ltd. The Company
owns a 17.62% interest in the Green Organic Dutchman, as well as a
51% interest in Aurora Nordic, which is constructing a 1,000,000
hybrid greenhouse similar to Aurora Sky. Including prorated
participations, Aurora is on track for a total production capacity
of around 200,000 kg per annum.
In addition, the Company holds approximately 17.23% of the
issued shares in leading extraction technology company Radient
Technologies Inc., based in Edmonton, and is in the process of completing
an investment in Edmonton-based
Hempco Food and Fiber for an ownership stake of up to 50.1%.
Furthermore, Aurora is the cornerstone investor with a 22.9% stake
in Cann Group Limited, the first Australian company licensed to
conduct research on and cultivate medical cannabis. Aurora also
owns Pedanios, a leading wholesale importer, exporter, and
distributor of medical cannabis in the European Union, based in
Germany. The Company offers
further differentiation through its acquisition of BC Northern
Lights Ltd. and Urban Cultivator Inc., industry leaders,
respectively, in the production and sale of proprietary systems for
the safe, efficient and high-yield indoor cultivation of cannabis,
and in state-of-the-art indoor gardening appliances for the
cultivation of organic microgreens, vegetables and herbs in home
and professional kitchens. Aurora's common shares trade on the TSX
under the symbol "ACB".
About CanniMed
CanniMed is a Canadian-based, international plant
biopharmaceutical company and a leader in the Canadian medical
cannabis industry, with 17 years of pharmaceutical cannabis
cultivation experience, state-of-the-art, GMP-compliant production
process and world class research and development platforms with a
wide range of pharmaceutical-grade cannabis products. In addition,
the Company has an active plant biotechnology research and product
development program focused on the production of plant-based
materials for pharmaceutical, agricultural and environmental
applications.
The Company, through its subsidiaries, was the first producer to
be licensed under the Marihuana for Medical Purposes Regulations,
the predecessor to the current Access to Cannabis for Medical
Purposes Regulations. It was the sole supplier to Health
Canada under the former medical marijuana system for 13 years,
and has been producing safe and consistent medical marijuana for
thousands of Canadian patients, with no incident of product
diversion or recalls.
For more information, please visit our
websites: www.cannimed.ca (patients)
and www.cannimedtherapeutics.com (investors).
On behalf of the Boards of
Directors,
AURORA CANNABIS INC.
Terry Booth
CEO
CanniMed Therapeutics Inc
Brent Zettl
CEO
Forward-Looking Information Cautionary
Statement
This news release contains certain
"forward-looking statements" within the meaning of such statements
under applicable securities law. Forward-looking statements are
frequently characterized by words such as "plan", "continue",
"expect", "project", "intend", "believe", "anticipate", "estimate",
"may", "will", "potential", "proposed" and other similar words, or
statements that certain events or conditions "may" or "will" occur.
These statements are only predictions. Forward looking statements
in release include statements regarding the improved Offer, the
anticipated value of the Offer, the number of shares to be issued
and timing to complete the Offer. Various assumptions were used in
drawing the conclusions or making the projections contained in the
forward-looking statements throughout this news release, including
assumptions based upon CanniMed's publicly disclosed information,
and that there will be no change in the business, prospects or
capitalization of CanniMed or Aurora. Forward-looking statements
are based on the opinions and estimates of management at the date
the statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. The Company is under no obligation, and
expressly disclaims any intention or obligation, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law. A more complete discussion of the risks
and uncertainties facing the Company appears in the Company's
Annual Information Form and continuous disclosure filings, which
are available at www.sedar.com.
Neither TSX nor its Regulation Services Provider (as that
term is defined in the policies of Toronto Stock Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Statement Respecting CanniMed Information
The information concerning CanniMed contained in this News
Release has been taken from, or is based upon, publicly available
information filed by CanniMed with securities regulatory
authorities in Canada prior to the
date of this News Release and other public sources. CanniMed has
not reviewed this News Release and has not confirmed the accuracy
and completeness of the CanniMed information contained herein.
Neither Aurora, nor any of the officers or directors of Aurora,
assumes any responsibility for the accuracy or completeness of such
CanniMed information or any failure by CanniMed to disclose events
or facts that may have occurred, or which may affect the
significance or accuracy of any such CanniMed information, but
which are unknown to Aurora. Aurora has no means of verifying the
accuracy or completeness of any of the CanniMed information
contained in this News Release or whether there has been a failure
by CanniMed to disclose events or facts that may have occurred or
may affect the significance or accuracy of any such
information.
Notice to U.S. Holders
The Offer is made for the securities of a company formed outside
of the United States. The Offer
will be subject to disclosure requirements of Canada that are different from those of the
United States. Financial statements included in the
documents, if any, will be prepared in accordance with Canadian
accounting standards and may not be comparable to the financial
statements of United States
companies.
It may be difficult for a securityholder in the United States to enforce his/her/its
rights and any claim a securityholder may have arising under the
U.S. federal securities laws, since the issuer is located in
Canada, and some or all of its
officers or directors may be residents of Canada or another country outside of
the United States. A
securityholder may not be able to sue a Canadian company or its
officers or directors in a court in Canada or elsewhere outside of the United States for violations of U.S.
securities laws. It may be difficult to compel a Canadian company
and its affiliates to subject themselves to a U.S. court's
judgment.
Securityholders should be aware that the issuer may purchase
securities otherwise than under the Offer, such as in open market
or privately negotiated purchases.
SOURCE Aurora Cannabis Inc.