RE:RE:RE:RE:RE:RE:RE:Differential between APH and Nuu This looks like a solid explanation. https://www.reddit.com/r/TheCannalysts/comments/7yzfu5/the_big_5_martini_bar_february_20_2018/
At the time of offer, Nuuvera had:
- ~89 million basic shares outstanding (includes the financing)
- ~8 million of in-the-money options and warrants
- total: rounds up to 98 million fditm s/o
- cash and equivalents post-financing of ~$90-92million
- options and warrants proceeds of $12-13million
- debt of $0
- total: call it $100 million in net cash
Aphria offered to Nuuvera shareholders Aphria shares + $1.00/share in cash -- no coincidence that this is essentially the amount of cash that Aphria was acquiring when it announced it would acquire Nuuvera (~$100million cash / ~100 million fully diluted shares).
Nuuvera went and spent a bunch of that cash to acquire the remaining stake in Avanti, to the detriment of its own shareholders. The initial offer had Aphria paying out no cash of its own. It's smart of Aphria not to keep the offer the same because if they did, they would have to shell out $40 million out of their own pocket. Given the offer never changed for the equity component, Aphria valuing Nuuvera as no better off after purchasing the remaining stake in Avanti (from a relative perspective give the large market move).
Can anyone explain why receiving less cash in the Aphria / Nuuvera deal helps Nuuvera fund its own acquisition of the remaining 49% interest in of Avanti?
The offer of cash was never to Nuuvera the company, it was to Nuuvera shareholders. It's not like that $1/share cash was going into Nuuvera's bank account (to become Aphria's bank account).