CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Cannabis producer Aphria rejects rival takeover bid, share price falls 7%

The Canadian cannabis producer rejected a $2 billion hostile takeover bid from competitor Green Growth Brands on the grounds that it significantly undervalues the company.

Aphria's board of directors has rejected rival Green Growth Brand’s (GGB) hostile takeover bid because it significantly undervalues the company.

US-based cannabis producer GGB submitted a takeover offer to acquire its Canadian rival Aphria in an all-stock deal on January 23, valuing the company at $2.06 billion.

Following Aphria’s rejection of GGB’s offer its share price tumbled more than 7%.

Green Growth Brand $2 billion bid undervalues Aphria

On Wednesday, Aphria rejected GGB’s offer after its board of directors felt it fundamentally undervalued the company.

‘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,’ Aphria independent board chair Irwin D. Simon said.

‘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,’ he added.

Cannabis stocks suffer losses

Aphria contends that it has strong growth potential and opportunities to ‘create substantial value for its shareholders’, with the company eager to expand into the wider medical-use market in Europe, Latin America and the Caribbean.

‘A hostile takeover by GGB ignores this bright outlook, which is another reason why the Aphria Board strongly urges shareholders to reject the bid,’ Simon added.

On Wednesday, other cannabis producers saw their share prices fall, with Aurora Cannabis, Tilray and Canopy Growth down between 4% and 5% respectively.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

See an opportunity to trade?

Go long or short on more than 17,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change
-
-
-
-
China 300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.