Aurora to file dissident circular against CanniMed's acquisition of Newstrike
EDMONTON - Aurora Cannabis Inc. is taking further steps to convince CanniMed Therapeutics Inc. shareholders that the proposed acquisition of Newstrike Resources Ltd. is a "terrible deal" compared to its own hostile bid of the Saskatoon-based medical marijuana producer.
Aurora (TSX: ACB) plans to file a dissident circular and will solicit votes against CanniMed's resolution to issue shares in connection with its proposed acquisition of the Tragically-Hip backed Newstrike (TSXV:HIP).
Edmonton-headquartered Aurora argues that CanniMed (TSX:CMED) is Newstrike's "last lifeline" and a significant portion of its capacity is unfunded.
Last month, Aurora launched an all-stock takeover bid for CanniMed, with one of its conditions being that CanniMed abandon its own proposed deal for Toronto-based Newstrike.
"We reviewed all disclosed and public information on Newstrike and on CanniMed management's proposed acquisition, and in our opinion it's a terrible deal for CanniMed shareholders," said Terry Booth, CEO of Aurora, in a statement Monday.
"It doesn't take a genius to see that a company with no revenues, no sales licence, no patients, no intellectual property of significant value... should not be worth giving 35 per cent of CanniMed away to Newstrike shareholders," he said of the smaller Newstrike.
CanniMed has said its plan to acquire Newstrike is the better plan and alleges that Aurora has launched an "insider bid" working jointly and in concert with some of its shareholders.
Both CanniMed and Aurora have called on regulators to intervene, with a hearing scheduled for Wednesday.
CanniMed's chief executive Brent Zettl on Monday called Aurora's plan to file a dissident circular a "desperate attempt to stop what they know is a better deal for CanniMed shareholders" and "take the spotlight off its own operational deficiencies."
"Aurora is a pumped-up stock listing which relies on proven producers to supply its customers and has had two product recalls in the last year it has been in business," he said in a statement.
"The uncertainty around Aurora's projected production capacity is one of the main reasons — along with its Monopoly Money offer for CanniMed — why the CanniMed Board rejected its offer."
Note to readers: This is a corrected story. A previous version said Aurora's headquarters is in Vancouver.