Curaleaf launches $260-million takeover bid for Aurora Cannabis

U.S.-based cannabis firm Curaleaf Holdings said on Tuesday it has launched a takeover bid for Aurora Cannabis valuing the Canadian peer at about US$260-million, a week after it first announced the proposal.

U.S.-listed shares of Aurora rose 3 per cent in early trading.

Aurora shareholders will get 0.3463 Curaleaf shares and 75 cents in cash for each Aurora share, amounting to a total consideration of US$4 per share. The offer is capped at US$5 per share if Curaleaf’s stock rises above a set level.

The offer represents an 11.1-per-cent premium to the Monday close of Aurora’s U.S.-listed shares, per Reuters calculations.

The offer is open until Dec. 1, subject to regulatory approvals and support from more than half of Aurora’s independent shareholders.

Aurora formed a special committee last week after Curaleaf first announced the offer. Curaleaf said it remains open to talks with the committee.

Curaleaf went public through a reverse takeover in October, 2018, the same month Aurora began trading on the New York Stock Exchange, as Canada’s legalization of recreational cannabis fuelled investor interest in the sector.

Aurora produces and markets medical and recreational cannabis, under brands such as Aurora, CanniMed, and MedReleaf, in Canada and international markets.

Cannabis shares, including Aurora, briefly surged in April after the U.S. eased restrictions on medical marijuana, but later reversed gains as investors concluded the changes were narrower than expected and left broader legal and funding hurdles unresolved.

The U.S. moves to loosen restrictions on medical cannabis could help companies secure funding and access banking services and public markets, though conflicting federal and state rules remain a challenge.