Post by
geodcan on Aug 12, 2023 5:26pm
A for B shares makes sense
to give up 2 shares instead of 3, of course, all dependant on this coming off as written.
Sadly I thought some of the deals written in regards to Canopy and Acreage were in stone, but apparently STZ insured that there was a way out by either cancelling the deal or re-visiting the deal.
I remember the original deal was valued at $4 billion when it was written but kudos to Canopy for leaving an out in the deal, where Canopy could walk from it if something drastic happened to the values. Which it did!
Under STZ's influence and know-how the dollars paid by Canopy was $38 million and the rest of the deal which is what you are focused on is the shareswap for Acreage to cash in their shares for Canopy shares.
Share certs are paper cheap to produce and even a better deal than dropping the $4 billion to $38 million.
The fixed Acreage shares are going to require 3.3 approx to swap them out for 1 Canopy share. The floating shares are going to require 2.2 approximately for 1 Canopy share.
This deal coming off as revisited should bring it back to life as a major coup for Canopy which is intent on setting up a new company Canopy USA as a holding company to vend in Canopy shares and a few other select companies with good brands and profit potential. If the new Canopy delivers, it will spark this back to life and those shares will be in demand.
Canopy and Acreage have both been disasters, at least as far as treatment from shareholders tanking the value of the shares or marketmakers!
My gut tells me that this is a long ways from dead because of the actions by these companies to merge and grow.
Canopy was a leading LP and is still formidable and under professional management now that I don't believe will walk away from the $5 plus Billion dollars already invested by STZ.
If this new effort needs an influx of cash, I believe that STZ will step up again to ride out the attrition that is going to come to those without finances or options.