So Tilray tried to buyout Hexo?Interesting post by Awareinvestor. This is probably the missing link folks needed to put things into perspective and what really went down with the current Tilray/Hexo deal. This information now reveals what really happened and it makes a lot more sense. If true, the company could liable for damages & Sload of lawsuits for failing to follow through with their fiduciary duties to s/h. Did Hexo mgmt really reject a $3 offer from Tilray? I don't know who was dumber, Hexo mgmt for refusing such a generous offer OR Tilray mgmt from actually making such a stupid one? You guys decide. Imo, this is a classical case of Dumb & Dumber.
Imho, this scenario is still possible for many reasons. First, Hexo will still need financial assitance in the next 12 months, so even though BK has been delayed, they are still not out of the woods with that possibility resurfacing next year if the environment does not improve. So selling out is still possible. Secondly, Hexo STILL hasn't implemented their share consolidation. Which is interesting in itself. Now it may be possible that they are waiting until the really last minute, which to me would be around the time they release Q1 results. If they don't mention any timeline with regards to a RS at that time, then an eventual buyout could still be very possible. Because why do the RS if you're gonna get boughtout really? There's no need for that or to worry about the Nasdaq listing if Hexo mgmt is selling out to Tilray.
The obivous question now is at what price? As i highly doubt that Tilray would re-offer or even think about giving Hexo $2 or $3 now, as they would get completely lynched by their s/h if they even tried, their debt deal with Hexo reveals quite a bit and ii more or less put a firm value on Hexo shares. There's a hard cap at 0.85 and that's probably the maximum Hexo s/h would get in any future buyout with Tilray. Now this doesn't eliminate the possibility of another suitor coming forward with a better offer, but i'm guessing that Tilray's debt deal with Hexo probably includes some handshake deal clauses that in the event that Hexo wants out, Tilray gets the whole company at the agreed cap. So probably all angles covered and probably NO possibility of another offer from anyone else coming forward.
So in a few words, if anyone owns Hexo stock with a cost basis higher than 0.85, you're pretty much screwed in any possible scenario. Not that you aren't anyway, with the way things are headed now.
GLTA