Newstrike Brands Ltd NWKRF

Aurora does not control Cannimed or Newstrike, what is next

[MartialArts]

It's critical that investors and traders alike read and understand the press releases and agreements here.  ACB wasn't successful in it's hostile take over of CMED.  CMED holds the cards and aces but unfortuately the market doesn't do deep research to understand the complexities.

The merger agreement between HIP and CMED are binding if and only if, shareholder approval is received.  The breakup fee is if there is a superior offer, for example, from ACB, APH or WEED (the top three).

The relatively small breakup fee is if, for example, CMED agrees to merge with ACB and now, there is a chance of this. HIP has already agreed to merge, CMED is saying "wait a second, we'll get ACB a change to really come to the table".  HIP issues a "we're ok with it"  because if ACB steps in, the value goes up.

ACB is close to a $6B company in market cap.  So the $10M is peanuts for them, they have just issued $200M of new debenditures (debt tradable for $14 ACB shares), so paying the break up fee as part of a CMED takeover is nothing.

What matters here is ACB and CMED are now talking.  The November ratio was 4.53 ACB shares for each CMED shares but it was capped. That is what killed the deal, otherwise all shareholders would have voted yes.  The cap prevented CMED holders from benefiting from the sector appreciation caused by alcohol companies getting involved in this sector, M&A activity and now BMO getting into the game underwriting this sector. The cap killed the hostile take over.  These are trickly to do in a highly volatile environment.  

BMO getting into weed stocks is BIG NEWS!  Other banks will follow.  Very bullish if you jump on VALUE and value today is sub $1B market cap.  There's a handful of player at that value price but CMED stands out.  That's why 90%+ of HIP said YES!

Today ACB trades $13.40 so the ratio would value (uncapped) CMED at $60.70 (double what it trades at).

So assuming a big buyout which Aurora would support since it puts them in #1 spot ahead of WEED.TO, you have Aurora buying CMED at $60+ per share, that puts HIP at $2 per share post mega, friendly merger.  

I welcome any intelligent responses from novices or experts alike.  I will not respond to kids trying to be the bullies in playground fights.  I don't even let pros come at me.

[gbenga]

Touche.  My sentiments precisely.  Thanks for untangling some of the complexities

[londonsate]

Agree every thing except the CMED price $60+,  remeber CEO of CMED said on BNN that he thinks CMED should be 40 to 50 not long ago, 60 is bit high

[dorward]

I'm a newbie here, but doesn't your $2 a share forecast of HIP assume that HIP stays part of cannimed? just because cannimed agrees to a deal with ACB doesn't mean HIP will be in the mix. they could walk away from the deal with HIP and then HIP gets left out, making the price of HIP drop. Am i understanding this correctly?

[MartialArts]

Yes, CMED could walk away.  But ACB is in big time acquisition move and the UP Cannabis brand gives them an edge WEED.TO doesn't have. Remember, ACB wants to be #1 and from all indications, if they play their cards right, they will get CMED on board and HIP as well.

[Green2017]

MARSHALARTS IS A FOOL PUT ON IGNORE, IF CMED HAD THE VOTES TO MERG WITH HIP, ZETTLE WOULDNT BE TALKING TO ACB, ACB IS IN THE DRIVER SEAT