Based on the 20-day volume weighted average price of GGB shares and the expressed exchange ratio of 1.5714 common shares of GGB for each Aphria share, the proposed bid would be approximately 23% below the Company’s average share price over the same period. Aphria shareholders should be aware that the value of GGB‘s per-share offer is based on a hypothetical valuation of its own shares, with no relation to the current price.
GGB’s management presented the offer to Aphria the morning of December 27, 2018, and immediately went public with its proposal, less than six hours later and after the market closed on the same day. The Board believes that GGB is attempting to acquire the company through a highly conditional offer at a significant discount to its current and future value.
Irwin Simon, Chair, said, “While we appreciate GGB’s interest in the value we have created at Aphria and our significant growth prospects, their proposal falls short of rewarding our shareholders for participating in such a transaction. Further, the proposed offer is quite risky given GGB’s condition to complete a brokered financing at a price that is more than double the recent average of their share price, as a key term to the proposal.”
Added Simon, “The Board has determined that the GGB proposal, as it currently stands, significantly undervalues the company. Aphria has a tremendous market opportunity as a leader in the sector and a strategic vision to meet those opportunities. Our focus is to realize that value for the benefit of all our shareholders.”
The Aphria Board of Directors has established an independent committee of directors to consider this proposal and any formal offer received. As previously disclosed, Aphria holds a passive investment in Green Acre Capital Fund II, which we understand has invested in numerous emerging cannabis companies, including GGB. The independent committee is comprised of directors with no relationship to Green Acre Capital Fund II or GGB. Aphria will continue on the execution of its current corporate strategy, including its international expansion plan, and the growth of its unique assets.