HEXO - Hexo Corp. sinks after Tilray Brands confirms acquisition
2023-04-10 16:35:36 ET
Hexo Corp. ( NASDAQ: HEXO ) plunged 24% in after hours trading after Tilray Brands ( NASDAQ: TLRY ) confirmed it agreed to acquire the cannabis company at a price below where it's currently trading.
Under the terms of the deal, Hexo ( HEXO ) holders will receive 0.4352 of a share of Tilray ( TLRY ) common stock in exchange for each HEXO, which implies a purchase price of $1.25 a share, a 24% discount to Hexo's closing price on Monday, according to a statement.
Hexo ( HEXO ) shares originally soared 30% in regular trading on Monday on a BNN Bloomberg report that Tilray was in talks to acquire Hexo in a deal valued at about $250 million. As part of the agreement, Tilray ( TLRY ) will exercise a $173 million convertible note it acquired from a former Hexo creditor.
The deal is to be effected by way of a court-approved plan of arrangement under the Business Corporations Act in Canada. The transaction needs to be approved by 66 2/3 % of votes cast by Hexo ( HEXO ) holders. A special meeting of HEXO holders to vote on the deal is expected before June 22.
Tilray ( TLRY ) shares fell 3.3% in after hours trading after the cannabis producer reported a Q3 adj EPS beat, though revenue missed analysts estimates.
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Hexo Corp. sinks after Tilray Brands confirms acquisition