Newstrike Brands Ltd NWKRF

Question

[trades2]

a circular for proxy voting was mailed out a week or so back.

• Newstrike shareholders to receive 33.0 CanniMed shares for each 1,000 shares of Newstrike

How will this play with new share price ?

[jwdstock]

HIP Shareholders would be stupid to vote yes on this because it would result in a reduced value of their shares due to the current hike in price. At current CMED value, HIP is worth <1.00/share which is less than half of current value. HIP likely to say no to the merger and will have to pay a penalty to CMED or it will be renegotiated

[Underwhelmed]

It doesnt change, they have to go by the original offer. CMED will just argue the inflation of the price is due to rumor of purchase. CMED will not budge and go with that share price. This is why I plan to dump before the final date of approval because you lose huge at that share price offer by CMED

[Luvtheleafs]

Aren’t you assuming acceptance. 

[jwdstock]

At this volume and value, you cannot assume acceptance. The issue will come up when one side passes on the deal as there is a clause that either side has to pay a penalty if they walk away from the deal... I maintain that CMED will walk and ACB door will open up...

[Partwaythere]

Guys careful; HIP is not a 1 billion dollar market cap. Just past 1.1 !!! I'm no pro but very strange this is running up so high. Good luck and hope you don't get stuck. My opinion only!

[Ranzero]

What do you mean by "ACB door will open"? Thanks in advance.

[jwdstock]

ACB position all along has been that they do not want CMED to merge with HIP. Every news release about their position has been that they do not want CMED to merge with HIP or they will walk. When CMED announced the supply agreement with HIP, ACB questioned it, which was valid, because if CMED and HIP merge, why would there need to be a supply agreement in place. If CMED owns HIP, they can supply

[Luvtheleafs]

One thing seems obvious to me. The offer will not be accepted given the spread. A revised offer will have to follow or all chips will be removed from the table. 

[Underwhelmed]

If majority of shareholders vote yes, then it is approved at the 33 per 1,000 spread. I do not see the majority voting for this unless it is huge insider deal