Aurora Cannabis says Curaleaf has yet to file US$5 bid variation
The special committee will review formal materials before the board recommends a response; shareholders were told to take no action.
Theo Marchetti
In Canada's takeover bid process, a proposed variation remained unfiled when the target responded on Monday, Oct. 5. Aurora Cannabis Inc. TSEACB NASDAQACB told shareholders to take no action on the proposed US$5-per-share package until its special committee reviews formal materials. Curaleaf Holdings, Inc. TSECURA OTCMKTSCURLF announced the new terms earlier Monday but said a variation notice would be filed promptly.
The terms Curaleaf announced on Oct. 5 call for US$1 in cash and 0.4013 of its subordinate voting shares for each Aurora share. Curaleaf based the US$5 implied value on its Oct. 2 closing share price; it also proposed a US$6 cap on consideration per Aurora share. The stock component accounts for the rest of the announced package, so the quoted US$5 is an implied value based on that earlier price.
"Today's announcement by Curaleaf is not a formal revised bid, and Aurora has not yet received the materials required to conduct a full and proper evaluation," Aurora executive chairman and chief executive Miguel Martin said in the Oct. 5 release.
Aurora said its special committee would assess the formal terms after receiving them and then make a recommendation to the board. The company repeated its Sept. 2 instruction for shareholders to take no action until the board communicates a formal recommendation. Its release did not give a calendar date for that decision.
Aurora shares NASDAQACB closed at US$3.92 at 4 p.m. EDT on Oct. 2, before Monday's announcements. That quote does not establish a share response to either Oct. 5 release.
Curaleaf Plans a Formal Notice
Curaleaf said it would file a Notice of Variation and Change with Canadian securities regulators and a new Form F-80 registration statement with the U.S. Securities and Exchange Commission. It did not give a filing date beyond saying the notice was expected promptly. The announced terms remain a proposed change to its existing takeover bid until the required materials are filed.
Aurora said its application to the Alberta Securities Commission challenged the absence of pro forma financial statements and what it viewed as an inadequate deposit period in Curaleaf's original bid circular. That is Aurora's account of its application, which was not reviewed for this report. The company described Curaleaf's plan to add financial statements and extend the tender period as a response to those concerns, without citing a commission ruling.
Curaleaf's release says it does not believe the extra pro forma statements are required, but it plans to include them in the variation notice. The bidder also said its proposal was developed from publicly available information and that it wants Aurora to engage in formal due diligence.
Read more: Curaleaf Holdings plans Aurora bid variation implying US$5 a share
Planned Expiry Is Dec. 4
Curaleaf said the current offer expires on Dec. 1. Its planned filing would extend that deadline to Dec. 4, and Aurora told holders they would have until at least that date to consider their options. The Dec. 4 expiry is the proposed tender deadline on which shareholders would decide whether to accept the varied bid if Curaleaf files it as announced.
