RE:Waiting for the next đź‘ž to dropPersonally, I'd agree that eventually Hexo will cease to exist as a stand alone cannabis LP company. Some of the name/brands such as Redecan products may remain - but marketed as part of the new owner's product line.
Dilution? Even the existing $40 million ATM is unlikey per Hexo, they won't get approval to implement it and it seems doubtful there's access to any other type of financing other than a private placement - and who is going to risk any sizable amount of cash in Hexo at this point? They dont even have security to offer - that's (facilties etc) tied up with the Tilray debt
The only company in a position to make a lowball offer would be Tilray - any other company would have to 'buy out' the $200 million debt owed to Tilray as part of the offer, makes Hexo pretty unattractive.
The only ones who MIGHT be interested are the Montours - who got $400 million in cash when they sold Redecan to Hexo - maybe they'd buy redecan back, with the cash that Hexo investors gave them - and still have two hundred million in the bank.
Talk about laughing all the way to the bank.
I think Tilray will alow Hexo to seek protection (as was done with Zenabis) and then Tilray will acquire the Hexo secured assets for the $200 million it's owed - and possibly a bit more, but it'll be done through the bankruptcy process.
Zenabis owed $60 million to SNDL when they declared bankruptcy - neither Hexo (who didnt have the cash) or Tilray (who didnt want the assets) bailed Zenabis out - and SNDL got two facilties (one being EU-GMP certified) and $30 million in inventory.
SNDL immedialely sold the one idle facilty for $10 million - but they still got the EU-GMP facility, the inventory and all the patents and equipment. The access to Europe and Isreal was worth the little extra that SNDL paid.
Hexo/Hexo investors never got a dime from the process.
Why WOULDN'T Tilray do the same thing - allow Hexo to go bankrupt and get the facilities, equipment and patents for the $200 million they're owed?