RE:RE:How Big Tobacco, Alcohol and Pharma Companies Could EnterDibah42... I think you misread my post. At no time did I mention a takeover via buying shares on the open market. I have made it very clear that I'm not in favour of a takeover at this time. It would be the biggest mistake management could make.
What I did say was that I'm in favour of partnering with big PTA (pharma, tobacco, alcohol) through some sort of contractual agreement without giving up control of the company. This way managment can continue to roll out their business plan at least until phase IV comes on line and perferably beyond.
At the same time, if whoever they partner with wants a small position in Aphria they have the option of always buying shares on the open market. This would prevent dilution similar to what happened to CGC. Trust me, less dilution long term is more benefical to the shareholders of Aphria. It would also help tighten the float. Plus, maybe there is someway of preventing a hostile take over through a contractual arrangemnt with a potential partner.
Don't forget Aphria is a medical marijuana company first. They should be looking to partner with a big pharma such as Pfizer or Johnson & Johnson. Between PTA, Pharma is the one sector that can afford to sit on the sidelines longer. They are not in the same rush as alcohol or tobacco to enter sector. Pharma most likely would be most receptive to some sort of contractual agreement.
Everybody seems to be jumping on the takeover bandwagon. I for one think there has to be a more creative way to secure partnerships in the industry without giving up control of the company.
Aphria is not hurting for cash. If anything they can always hire more talent to help them expand. Also, no need to go crazy through expansion. A controlled expansion will ensure long term survival. I can guarantee you, most of the current LPs won't even exist five years from now. I've always maintained growth companies fail, not because they dont have the business, but becuase they don't know how to control growth.
Not one gram of rec has been sold and everybody is all excited about a potential buyout. That would be the worst scenario at this point for shareholders. Management is very competenat and have executed perfectly to now. Why sell out when they dont need to.
Don't get me wrong, there are a number of LP's that have been specifically set to be taken over from day 1. Nothing wrong with that strategy. However, I believe Aphria can maximize shareholder value by not being bought out too soon. That is why I favour partnership over a buyout at this time.
Just my opinion.
M
Dibah42 wrote: Monte: I have never come across a major takeover via buying shares on the public market. Depending on the float the s/p would go parabolic. Besides the co. being bought gets little out of the transaction.