LEAMINGTON, ON, April 15, 2019 /PRNewswire/ - Aphria Inc.
("Aphria" or the "Company") (TSX:
APHA and NYSE: APHA) today announced that it
has entered into a series of transactions that will accelerate the
expiry date to April 25, 2019 for the
previously announced take-over bid by Green Growth Brands Inc.
("GGB") and will terminate the arrangements with GA
Opportunities Corp. ("GAOC") for consideration of
$89.0 million.
Irwin D. Simon, Aphria's Chairman
and Interim Chief Executive Officer stated, "We are very pleased to
move forward with this favorable resolution as we continue to focus
on the long-term growth of our leading cannabis business. We plan
to use the $89.0 million in proceeds
from the transaction to fund our strategic global expansion
initiatives. On behalf of our Board of Directors and management
team, we continue to recommend that Aphria shareholders reject the
GGB offer and do not tender their Aphria shares to the GGB
offer."
Aphria has entered into a shortened deposit period agreement
with GGB to facilitate the acceleration of the expiry of GGB's
offer to purchase all of the issued and outstanding shares of
Aphria (the "GGB Offer"). In that regard, Aphria has agreed
to reduce the initial deposit period of the bid to 92 days from
January 23, 2019, the date that GGB
commenced the GGB Offer. GGB will be mailing a Notice of Variation
providing that the GGB Offer will expire at 5:00 p.m. on April 25,
2019. Based on the closing price of $3.86 per GGB share on the Canadian Securities
Exchange ("CSE") on April 12,
2019, the implied consideration under the GGB Offer would be
$6.07 per Aphria share, representing
a significant 54.7% discount to Aphria's closing price on the
Toronto Stock Exchange of $13.41 per
share on the same day.
In light of the foregoing and for the reasons previously
disclosed, Aphria continues to recommend that Aphria shareholders
reject the GGB Offer and do not tender their Aphria shares to the
GGB Offer.
In connection with the foregoing, GGB has entered into a share
purchase agreement (the "Share Purchase Agreement") with
GAOC pursuant to which GGB has agreed to purchase (the "Share
Repurchase") for cancellation 27.3 million shares held by GAOC,
for an aggregate purchase price of $89.0
million (the "Purchase Price"). The terms of
the Share Purchase Agreement include, among other things, that GGB
will pay in cash $50.0 million of the
Purchase Price to GAOC within 30 days of the date hereof (the
"Closing Date") and will issue a promissory note (the
"GGB Note") to GAOC for $39.0
million due in six months from the Closing Date. GGB has
granted a security interest to GAOC to secure its obligations under
the Share Purchase Agreement and the GGB Note. The completion of
the Share Repurchase is conditional on the Purchase Price, on a per
share basis, not being greater than the simple average of the
closing price of the GGB shares on the CSE for the 20 trading days
prior to the Closing Date.
Aphria and GAOC have also entered into a debt/call option
settlement agreement (the "Settlement Agreement") pursuant
to which Aphria has agreed to settle the debt owed under a
promissory note issued by GAOC to Aphria in the amount of
$55.0 million and terminate its
rights under a related call option in consideration for total
consideration of $89.0 million
payable by GAOC upon the receipt of funds received under the Share
Purchase Agreement and the GGB Note. GAOC has granted a security
interest to Aphria to secure its obligations under the Settlement
Agreement.
Advisors
Legal counsel to Aphria's Board and Independent Committee was
Fasken Martineau DuMoulin LLP and Scotiabank was financial advisor
for takeover defense. Jefferies LLC acted as financial advisor to
the Company in connection with the Settlement Agreement, and Moelis
& Company LLC was financial advisor to the Board in connection
with the takeover bid. Gagnier Communications served as strategic
communications advisor and Laurel
Hill acted as Aphria's shareholder communications advisor
and information agent.
We Have A Good Thing Growing
About Aphria
Aphria is a leading global cannabis company driven by an
unrelenting commitment to our people, product quality and
innovation. Headquartered in Leamington,
Ontario – the greenhouse capital of Canada – Aphria has been setting the standard
for the low-cost production of safe, clean and pure
pharmaceutical-grade cannabis at scale, grown in the most natural
conditions possible. Focusing on untapped opportunities and backed
by the latest technologies, Aphria is committed to bringing
breakthrough innovation to the global cannabis market. The
Company's portfolio of brands is grounded in expertly-researched
consumer insights designed to meet the needs of every consumer
segment. Rooted in our founders' multi-generational expertise in
commercial agriculture, Aphria drives sustainable long-term
shareholder value through a diversified approach to innovation,
strategic partnerships and global expansion, with a presence in
more than 10 countries across 5 continents.
For more information, visit: aphria.ca
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain
information in this news release constitutes forward-looking
statements under applicable securities laws. Any statements that
are contained in this news release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward looking statements are often identified by terms such as
"may", "should", "anticipate", "expect", "potential", "believe",
"intend" or the negative of these terms and similar expressions.
Forward-looking statements in this news release include, but are
not limited to, statements with respect to internal expectations,
estimated margins, expectations with respect to actual production
volumes, expectations for future growing capacity and costs, the
completion of any capital project or expansions, and expectations
with respect to future production costs. Forward-looking statements
necessarily involve known and unknown risks, including, without
limitation, risks that the proposed transaction involving Green
Growth Brands and GAOC will not have the anticipated effect on
Aphria or its business or will not be consummated for any
reason; risks associated with general economic conditions;
adverse industry events; marketing costs; loss of markets; future
legislative and regulatory developments involving cannabis;
inability to access sufficient capital from internal and external
sources, and/or inability to access sufficient capital on
favourable terms; the cannabis industry in Canada generally, income tax and regulatory
matters; the ability of Aphria to implement its business
strategies; competition; crop failure; currency and interest rate
fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive.
Readers are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those
anticipated.
The forward-looking statements included in this news release are
made as of the date of this news release and the Company does not
undertake an obligation to publicly update such forward-looking
statements to reflect new information, subsequent events or
otherwise unless required by applicable securities laws.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
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SOURCE Aphria Inc.