This deal should make Aphria shorts very happyFirst, this is a reverse takeover proposal where Aphria shareholders would end up with about two-thirds of the equity in the merged company.
GGB is the product of a reverse takeover done only last month with the aparent motive to keep the company alive - it was essentially insolvent at the time, with little revenue, working cap deficiency of over $50MM and no earnings to service substantial interest requirements. At that time (Nov 9th), shares of the newly merged GGB were deemed to have a value of $.36 - that's right, 36 cents and not $7.
The core strength of GGB seems to be its ability to issue lots of news releases in order to pump the share price up to about $5 but it has never been near $7 and it is a dream to think it could raise $300MM at $7.
Using the average share price of GGB over the last month of about $3.25, the valuation for the Aphria shares would be about $5.10, more than 30% below where they closed today.
Hard to see how this proposed takeover goes anywhere.