Aurora Snipes Back At Curaleaf’s Hostile Bid

Aurora Cannabis fired back at Curaleaf on Wednesday following the latter's $4 per share hostile bid. Aurora's CEO, Miguel Martin, urged shareholders to remain indifferent, stating that Curaleaf's public offer aimed to pressure Aurora shareholders into making a short-term decision for Curaleaf's benefit. Aurora dismissed this, emphasizing the company's lack of financial improvements, restructuring costs, and unfulfilled promises.

Curaleaf dismissed Aurora's response, claiming that the bid reflected billions written off, a restructuring period, bloated costs, and unfulfilled promises. The offer implied a $4 per share price, or a 45% premium over Aurora's 30-day average, as of August 10. Since the bid's announcement, Aurora's share price has risen by 34% to $3.89 per share, while Curaleaf's OTC-listed shares are up about 6% to $9.80.

Aurora's board established a special committee to evaluate the offer. Both companies' stocks have increased since the bid's announcement, a surprising turn given the usual decline in share prices following such events. Jordan, Curaleaf's CEO, suggested that the market might favor the deal, reflecting its potential worth at Nvidia-level.

He mentioned initial friendly discussions with Aurora's CEO in June and July, but these talks dissolved, leading Curaleaf to adopt a hostile stance. The bid hinges on Aurora's EU-GMP certified cultivation facilities, which enable the export of medical cannabis to European markets, including Germany and Portugal. Canada's favorable regulations for cannabis export compared to the U.S., where cannabis remains federally illegal, give Aurora an advantage.

Curaleaf's international business is expanding 25-30% annually, compared to 5-10% growth in the U.S. Aurora's Martin asserted that Curaleaf aims to acquire Aurora's strategic EU-GMP facilities and leading medical cannabis platforms at the lowest possible price.