Aurora Cannabis makes $24-a-share offer for CanniMedAurora Cannabis makes $24-a-share offer for CanniMed 2017-11-14 19:37 ET - News Release Also News Release (C-CMED) CanniMed Therapeutics Inc Mr. Terry Booth of Aurora Cannabis reports AURORA CANNABIS SUBMITS PROPOSAL TO CANNIMED THERAPEUTICS BOARD At the request of Investment Industry Regulatory Organization of Canada, Aurora Cannabis Inc. has disclosed a proposal to acquire all of the issued and outstanding common shares of CanniMed Therapeutics Inc. The proposal was delivered to the board of directors of CanniMed on Nov. 13, 2017, and Aurora is seeking to pursue a mutually agreed upon combination with CanniMed. CanniMed has not yet engaged in active discussions with Aurora, however, Aurora welcomes the opportunity to do so, such that CanniMed's shareholders can benefit from the significant inherent value in the proposal. Aurora has requested that CanniMed's board respond to the proposal prior to 5 p.m. PT on Friday, Nov. 17, 2017, failing which, Aurora intends to commence a formal takeover bid for CanniMed. Transaction highlights The all-share proposal, valued at $24 per CanniMed share based on the closing share price of Aurora on Nov. 14, 2017, reflects a 56.9-per-cent premium over the most recent closing price of CanniMed shares on Nov. 14, 2017; Irrevocable lock-up agreements with approximately 38 per cent of CanniMed shareholders to vote in favour of Aurora's proposal or tender to Aurora's bid; The combination would create a global leader in the cannabis industry with a pro forma market capitalization exceeding $3.0-billion; Combined entity would serve approximately 40,000 active registered patients; Aurora-CanniMed combined would benefit from enhanced capacity for future growth with greater access to capital and liquidity, with trading volumes amongst the highest in the cannabis industry. Pursuant to the proposal, CanniMed shareholders will be entitled to receive a maximum of $24 per CanniMed share or 4.52586207 Aurora shares, based on the 20-day volume-weighted average price of Aurora. Based on the closing price of Aurora shares on Nov. 14, 2017, this translates to 3.74415 Aurora shares for each CanniMed share. Based on the closing prices of Aurora and CanniMed on Nov. 14, 2017, this represents a premium of approximately 56.9-per-cent premium over the closing price of CanniMed shares on Nov. 14, 2017, and a 74.7-per-cent premium over the 20-day volume-weighted average price for the period ended Nov. 14, 2017. Upon completion of the transactions contemplated by the proposal, based on the closing prices of Nov. 14, 2017, CanniMed's shareholders will hold approximately 16 per cent of the issued and outstanding shares of Aurora. "Aurora and CanniMed are a great fit, truly complementary, and I am convinced we can generate even greater value by combining the two companies and aligning our efforts strategically," said Terry Booth, chief executive officer. "Aurora has the management expertise, capital markets strength, distribution channels, brand power and growth prospects to successfully integrate CanniMed into Aurora -- the fastest-growing cannabis company with the sector's most exceptional execution track record." Lock-up of shareholders of CanniMed In connection with the proposal, Aurora has entered into irrevocable lock-up agreements in support of its proposal from shareholders representing approximately 38 per cent of CanniMed's outstanding shares. Under the lock-up agreements, the locked-up shareholders are precluded from tendering or voting any of their CanniMed common shares in favour of any other acquisition proposal relating to CanniMed and are required to vote against other acquisition proposals or actions which might prevent, delay or frustrate Aurora's proposal. Compelling strategic rationale Aurora believes the value that would result from the combination of the two companies is substantial. Together, their unique and complementary strengths would drive value, create the leading cannabis company across multiple markets and the combined entity will lower production costs while connecting consumers via market leading brands. Among other things, the combined entity will: Have a combined total of over 40,000 active registered cannabis patients in Canada; Have significant cultivation capacity with five state-of-the-art facilities and additional facilities planned; Have existing or financed capacity of over 130,000 kilograms of annual production with significant additional capacity planned; Further strengthen both companies' international presence with operations and agreements in the European Union, Australia and the Cayman Islands; Increase the capacity to reach and service a wider international patient base with a broader product offering; Improve yields through cross-application of proprietary technologies from each of Aurora and CanniMed; Provide CanniMed with access to Aurora's network of strategic partners, such as extraction technology leader Radient Technologies; Enable CanniMed to leverage Aurora's sector leadership in innovation to accelerate development; Expand both companies' portfolio of genetics; Enable CanniMed to leverage Aurora's unparalleled e-commerce platform, including the only mobile app in Canada that enables customer purchases. Additional details of the proposal Readers are cautioned that Aurora may determine not to proceed with the proposal if: (i) it identifies material adverse information concerning the business, affairs, prospects or assets of CanniMed not previously disclosed by CanniMed; (ii) CanniMed implements or attempts to implement defensive tactics (such as the adoption of a shareholder rights plan, the grant of an option (or similar right) to purchase material assets, the issue of additional shares of CanniMed or the announcement of a significant acquisition by CanniMed) in relation to the proposal. There can be no assurance that the proposal will result in a friendly combination of Aurora and CanniMed or would proceed on the terms set out in this news release. Should a takeover bid be commenced, full details of the offer will be included in a formal offer and the takeover bid circular to be filed with securities regulatory authorities and mailed to CanniMed shareholders. The offer will be subject to certain conditions, including, but not limited to, receipt of all necessary regulatory clearances, absence of material adverse changes in CanniMed and acceptance of the offer by CanniMed shareholders owning not less than 66-2/3rds per cent of the CanniMed common shares on a fully diluted basis. Once the 66-2/3rds-per-cent acceptance level is met, Aurora intends, but is not required to, take steps to acquire all of the outstanding CanniMed common shares and other convertible securities or rights to acquire CanniMed common shares. About Aurora Cannabis Inc. Aurora's wholly owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations (ACMPR). The company operates a 55,200-square-foot, state-of-the-art production facility in Mountain View county, Alberta, known as Aurora Mountain, a second 40,000-square-foot high-technology production facility known as Aurora Vie in Pointe-Claire, Que., on Montreal's West Island, and is currently constructing an 800,000-square-foot production facility, known as Aurora Sky, at the Edmonton International Airport. In addition, the company holds approximately 9.6 per cent of the issued shares (12.9 per cent on a fully diluted basis) in leading extraction technology company Radient Technologies, based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1 per cent. Furthermore, Aurora is the cornerstone investor with a 19.9-per-cent stake in Cann Group Ltd., the first Australian company licensed to conduct research on and cultivate medical cannabis.