Aphria rejects Green Growth's bid/ Your Morning
Despite a recent comeback of sorts, beleaguered Canadian licensed producer Aphria Inc. (NYSE:APHA) saw shares tumble on Wednesday morning following their outright rejection of a hostile takeover bid by Green Growth Brands (OTCMKTS:GGBXF).
As of Wednesday afternoon, the stock was down 6.72 percent, trading at $9.99 on the New York Stock Exchange. Aphria recently made headlines after stock prices bounced back from the beating they took following the short-seller attack by Hindenburg Research late last year.
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According to a statement released by Aphria on Wednesday, the bid by Green Growth Brands severely undervalues the company. They noted that shareholders would be giving up a 36 percent interest in the company in return for a management group that has limited experience in the cannabis industry.
Aphria’s Board of Directors Rejects Green Growth Brand’s Hostile Takeover Bid as Significantly Undervalued and Inadequate https://t.co/RKqSzCjVmc pic.twitter.com/6TmVbVnQ64
– aphria (@aphriainc) February 6, 2019
The offer “[d]oes not account for Aphria's bright outlook, either as an independent company or in partnership with a strategic partner, which offers Aphria shareholders substantial value creation,” read the statement.
Aphria has remained firm in its opposition to Green Growth’s offer since the beginning of the year, with many analysts and investors agreeing with their position.
"The Aphria Board of Directors unanimously believes that GGB's hostile offer is significantly undervalued and inadequate and not in the interest of Aphria shareholders on multiple grounds," said Irwin D. Simon, Aphria's independent Board Chair in a statement. "Regardless of their brazen attempts to suggest otherwise, GGB is asking Aphria shareholders to accept a substantial discount on their shares, as well as delisting from both the TSX and NYSE, resulting in a vast dilution of their ownership in Aphria.
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He continued: "Today, Aphria is in a better position than ever to create long-term value for our shareholders, following a positive second quarter and continued progress expanding our production capacity and global footprint.”