OTCPK:GBGPF - Post by User
Post by
MartialArtson Jan 21, 2018 3:33pm
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Post# 27404209
The final deal will be between 4.5259 and 6.958 ACB per CMED
The final deal will be between 4.5259 and 6.958 ACB per CMEDThis is assuming an "all shares" transaction with zero cash, based on math and publicly available information.
With 170M ACB shares planned by ACB management and officially approved by ACB shareholders for this acquisition this week, we are objectively looking at:
4.5259 ACB shares per old CMED shares (24.43M) with no dollar cap since it's not a cash offer or
6.958 ACB shares per new dilluted but higher value CMED (CMED+HIP 24.43M+12.84M) shares
If you calculate the "new" CMED which is
37.27M shares times and exchange them with 170M ACB shares, you magically get 4.56 ACB shares per new CMED shares!
As a fan of math, I doubt very much these numbers line up by magic. The math appears to confirm Aurora management had insider knowledge of the details of the Newstrike valuation since Canaccord is their financial advisors and Canaccord apparently did valuation work for Newstrike?
The Globe and Mail reported the connection:
"CanniMed is also questioning the actions of investment bank Canaccord Genuity, which it says had access to its confidential financial and operating data as an adviser to Newstrike before being engaged by Aurora for its hostile bid. "Canaccord was subject to non-disclosure obligations "
https://www.theglobeandmail.com/report-on-business/streetwise/hostile-bid-for-cannimed-an-inside-job-ceo-says/article37298782/
Interestingly Canaccord and #1 shareholder Golden Opportunity Fund with past fund CFO and CMED Director are named in the lawsuit recently filed by Cannimed
https://www.businesswire.com/news/home/20180112005721/en/CanniMed-Therapeutics-Launches-725-Million-Lawsuit-Alleging
Lawsuits are messing, costly and discoveries end up in the press creating bad investor sentiment. Anyone having ever looked at these in the past know that an amiable settlement is the best avenue especially for public traded companies.
I hope that management at CMED can put the bad blood behind them as they work hard to resolve this.
ACB's intentions towards Newstike should be clearner. If ACB and CMED decide they don't want Newstrike as part of this merge, that allows the 170M shares to be offered at 170M/24.43M old CMED shares so 6.958 ACB shares and still stay within the 170M ACB shares allocated this week without paying a dime in cash.
It's unclear to me how much they value the UP Cannabis/Tragically Hip brand. In December they issued a number of very public negative views towards Newstrike. That could have all been market and hostile takeover positioning?
In any case, I'm a fan of following the rules and fair play. ACB obviously knows how to push the capital markets to their maximum, and then some. Let's hope that CMED is up to the challenge but considering the fancy footwork they have done in securing the supply side from Newstike even without a merger (with the $10M or 41cents per share breakup agreement), I have confidence that both these "best of breed" market participants will come to an agreement on a fair and equitable merger that is a win-win-win for ACB-CMED and the sector. The bad blood and toxicity has to stop.