Green Growth Brands Ltd., a United States marijuana company, announced on December 27th that they are making an offer to cannabis producer Aphria that values the producer at $2.8 billion. Green Growth stated that Aphria shareholders are to receive just over 1.57 Green Growth shares for each Aphria share they hold.
The Green Growth brand recently joined with Xanthic Biopharma Inc. and is trading under the GGB symbol. The stock price for Green Growth opened at $4.50 on December 27th and closed at $4.98.
Irwin D. Simon has been appointed as the independent chair for Aphria’s board of directors while Vic Neufeld, Aphria’s CEO, is the current chair.
Short-sellers Hindenburg Research and Quintessential Capital Management alleged that Aphria’s acquisition of LATAM Holdings assets in Columbia and Jamaica that total $280 million US from Sythian Biosciences are largely worthless.
Gabriel Grego, a member of the Quintessential Capital Management team, argued the point that Aphria had spent over $700 million purchasing subsidiaries that don’t add any value to the company. He also stated that the subsidiaries did little other than enrich insiders at the companies that were taken over by the cannabis producer.
After being targeted by the two short-sellers, law firm Koskie Minsky LLP, has stated that there is a proposed class action lawsuit against Aphria that is being filed on behalf of Aphria’s investors with shares held between July 17th and December 3rd. Many believe that the U.S. marijuana company Green Growth took it as a perfect opportunity to plan a hostile takeover of the producer.
As of the moment, Vic Neufeld of Aphria is staying on as chief executive officer and a director on the board. Aphria has yet to comment on the allegations made by Hindenburg Research and Quintessential Capital Management or the offer made by Green Growth Brands Ltd.