Curaleaf Holdings, Inc on Tuesday sent a letter to Aurora Cannabis Inc. shareholders urging them to accept its bid to take over the company. In the letter, Curaleaf CEO and Chairman Boris Jordan said Aurora shareholders “have an important choice to make about the future” of their investment.
“Accept a 45% premium and become an owner of the world’s leading cannabis company with strong growth prospects. Or remain invested in a standalone business stuck in a multi-year turnaround plan whose own management has guided revenue and adjusted EBITDA lower next year.” — Jordan in the letter
In a statement, Jordan described Aurora as “a shrinking business that is burning cash and getting less profitable by the day.”
Curaleaf announced its hostile takeover bid of the Canadian company in August. The offer to shareholders would see the Curaleaf purchase all of Aurora’s issued and outstanding shares at $4 per Aurora Cannabis share, which Curaleaf said is a 45% premium to Aurora’s 30-day volume-weighted average price (VWAP) and a 110% to Aurora’s 30-day VWAP excluding balance sheet cash.
Earlier this month, Aurora urged its shareholders to reject the proposal, saying it is debt-free and currently holds CA$149 million in cash, while Curaleaf has debts exceeding CA$1 billion.
In the letter to Aurora shareholders, Jordan said combining the two businesses “delivers immediate value while allowing shareholders to participate in the future upside of the largest, most diversified global cannabis platform” and that a combined company “would create the global cannabis leader with operations across 17 countries, more than US$1.5 billion of last twelve-month revenue, nearly US$350 million of adjusted EBITDA and at least US$40 million of expected annual cost synergies.”
In a September 2 statement, Miguel Martin, executive chairman and CEO of Aurora, called the would-be transaction as “harmful to Aurora shareholders as the hostile bid is inadequate.”
“Shareholders of Aurora should understand plainly: Curaleaf is not offering you fair value for your shares, and your cash, your rights and your future upside are at stake,” Martin said in the statement. “Curaleaf is attempting to use Aurora shareholders’ own cash to help finance this bid, acquire Aurora’s assets at a discount and shift material risks onto our shareholders. The Board strongly and unanimously recommends that shareholders reject the offer, by taking no action and do not tender their shares. Aurora has been built for the long-term and staying with our Company is the right decision.”
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