Aurora Cannabis Executes Lock-up Agreements
with 38% of CanniMed Shareholders
VANCOUVER, Nov. 14, 2017 /CNW/ - At the request of IIROC,
Aurora Cannabis Inc. (TSX: ACB) ("Aurora") announced today
that it has submitted a proposal (the "Proposal") to acquire
all of the issued and outstanding common shares of CanniMed
Therapeutics Inc. (TSX: CMED) ("CanniMed"). The proposal was
delivered to the Board of Directors of CanniMed on November 13, 2017 and Aurora is seeking to pursue
a mutually agreed upon combination with CanniMed. CanniMed has not
yet engaged in active discussions with Aurora, however, Aurora
welcomes the opportunity to do so, such that CanniMed's
shareholders can benefit from the significant inherent value in the
Proposal. Aurora has requested that CanniMed's Board respond
to the Proposal prior to 5:00 pm
(Vancouver time) on Friday November 17, 2017, failing which, Aurora
intends to commence a formal takeover bid for CanniMed.
Transaction Highlights
- All-share Proposal, valued at $24.00 per CanniMed share based on the closing
share price of Aurora on November 14,
2017, reflects a 56.9% premium over the most recent closing
price of CanniMed shares on November 14,
2017
- Irrevocable lock-up agreements with approximately 38% of
CanniMed shareholders to vote in favour of Aurora's proposal or
tender to Aurora's bid
- The combination would create a global leader in the cannabis
industry with a pro-forma market capitalization exceeding
$3.0 billion
- Combined entity would serve approximately 40,000 active
registered patients
- Aurora – CanniMed combined would benefit from enhanced capacity
for future growth with greater access to capital and liquidity,
with trading volumes amongst the highest in the cannabis
industry
Pursuant to the Proposal, CanniMed shareholders will be entitled
to receive a maximum of $24 per
CanniMed share or 4.52586207 Aurora shares, based on the 20-day
volume weighted average price of Aurora. Based on the closing price
of Aurora shares on November 14,
2017, this translates to 3.74415 Aurora shares for each
CanniMed share. Based on the closing prices of Aurora and CanniMed
on November 14, 2017, this represents
a premium of approximately 56.9% premium over the closing price of
CanniMed shares on November 14, 2017
and a 74.7% premium over the 20-day volume weighted average price
for the period ended November 14,
2017. Upon completion of the transactions contemplated by
the Proposal, based on the closing prices of November 14, 2017, CanniMed's shareholders will
hold approximately 16% of the issued and outstanding shares of
Aurora.
"Aurora and CanniMed are a great fit, truly complementary, and I
am convinced we can generate even greater value by combining the
two companies and aligning our efforts strategically," said
Terry Booth, CEO. "Aurora has the
management expertise, capital markets strength, distribution
channels, brand power and growth prospects to successfully
integrate CanniMed into Aurora - the fastest-growing cannabis
company with the sector's most exceptional execution track
record."
Lock-Up of Shareholders of CanniMed
In connection with the proposal, Aurora has entered into
irrevocable lock-up agreements in support of its proposal from
shareholders representing approximately 38% of CanniMed's
outstanding shares. Under the lock-up agreements, the locked-up
shareholders are precluded from tendering or voting any of their
CanniMed common shares in favour of any other acquisition proposal
relating to CanniMed and are required to vote against other
acquisition proposals or actions which might prevent, delay or
frustrate Aurora's proposal.
Compelling Strategic Rationale
Aurora believes the value that would result from the combination
of the two companies is substantial. Together, their unique and
complementary strengths would drive value, create the leading
cannabis company across multiple markets, and the combined entity
will lower production costs while connecting consumers via market
leading brands. Among other things, the combined entity will:
- have a combined total of over 40,000 active registered cannabis
patients in Canada;
- have significant cultivation capacity with five
state-of-the-art facilities, and additional facilities
planned;
- have existing or funded capacity of over 130,000 kilograms of
annual production with significant additional capacity
planned;
- further strengthen both companies' international presence with
operations and agreements in the European Union, Australia and the Cayman Islands;
- increase the capacity to reach and service a wider
international patient base with a broader product offering;
- improve yields through cross-application of proprietary
technologies from each of Aurora and CanniMed;
- provide CanniMed with access to Aurora's network of strategic
partners, such as extraction technology leader Radient
Technologies;
- enable CanniMed to leverage Aurora's sector leadership in
innovation to accelerate development;
- expand both companies' portfolio of genetics; and
- enable CanniMed to leverage Aurora's unparalleled e-commerce
platform, including the only mobile app in Canada that enables customer purchases.
Additional Details of the Proposal
Readers are cautioned that Aurora may determine not to proceed
with the Proposal if: (i) it identifies material adverse
information concerning the business, affairs, prospects or assets
of CanniMed not previously disclosed by CanniMed; (ii) CanniMed
implements or attempts to implement defensive tactics (such as the
adoption of a shareholder rights plan, the grant of an option (or
similar right) to purchase material assets, the issue of additional
shares of CanniMed, or the announcement of a significant
acquisition by CanniMed) in relation to the Proposal. There can be
no assurance that the Proposal will result in a friendly
combination of Aurora and CanniMed or would proceed on the terms
set out in this news release.
Should a takeover bid be commenced, full details of the offer
will be included in a formal offer and the take-over bid circular
to be filed with securities regulatory authorities and mailed to
CanniMed shareholders. The offer will be subject to certain
conditions, including, but not limited to, receipt of all necessary
regulatory clearances, absence of material adverse changes in
CanniMed and acceptance of the offer by CanniMed shareholders
owning not less than 66-2/3% of the CanniMed common shares on a
fully-diluted basis. Once the 66-2/3% acceptance level is met,
Aurora intends, but is not required to, take steps to acquire all
of the outstanding CanniMed common shares and other convertible
securities or rights to acquire CanniMed common shares.
This press release does not constitute an offer to buy or an
invitation to sell, or the solicitation of an offer to buy or
invitation to sell, any of the securities of Aurora or CanniMed.
Such an offer may only be made pursuant to an offer and take-over
bid circular filed with the securities regulatory authorities in
Canada.
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.
In addition, the Company holds approximately 9.6% of the issued
shares (12.9% on a fully-diluted basis) 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 19.9% 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".
On behalf of the Board of Directors,
AURORA CANNABIS INC.
Terry Booth
CEO
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. Various assumptions were
used in drawing the conclusions or making the projections contained
in the forward-looking statements throughout this news release.
Forward-looking statements include, but are not limited to, the
successful completion of the Offering and the use of proceeds of
the Offering and the Company's intention to continue international
and domestic expansion. 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.
SOURCE Aurora Cannabis Inc.