A new offer emerges after months of takeover uncertainty
Aurora Cannabis shares moved sharply higher after Organigram Global agreed to acquire the Canadian cannabis producer in a transaction valued at about C$561 million. The proposed deal places a board-backed offer before Aurora shareholders after the company rejected a hostile approach from Curaleaf Holdings.
The stock gained more than 22 per cent on Tuesday, according to the available market report. The movement reflects the significance of Organigram's proposal for investors who have been weighing competing takeover possibilities. Unlike Curaleaf's offer, which Aurora rejected, the Organigram agreement has received approval from Aurora's board of directors.
Under the agreement, Organigram would acquire all outstanding Aurora shares for C$7.80 per share. On a fully diluted equity basis, that values the transaction at approximately C$561 million. The offer is described as a 93 per cent premium to Aurora's unaffected share price on Aug. 10, before Curaleaf's initial takeover approach became public.
Shareholders face three consideration choices
The proposed arrangement gives Aurora investors a choice in how they receive the consideration, although the all-cash and all-share alternatives are subject to proration. That means shareholders who select one of those options could receive a different mix than requested if elections exceed the amounts available under the agreement.
| Election | Proposed consideration |
|---|---|
| All cash | C$7.80 per Aurora share |
| All shares | 5.8626 Organigram shares for each Aurora share |
| Combination | C$3.75 in cash and 3.0431 Organigram shares |
The cash alternative would provide a fixed payment if the transaction closes, while the value of the share-based choices would change with Organigram's share price. The combination option is positioned as a middle course, offering some immediate cash while preserving exposure to the future performance of the enlarged company.
Organigram offer exceeds revised Curaleaf proposal
Organigram's proposal also represents a 21 per cent premium to Curaleaf's revised offer, announced Oct. 6. Curaleaf had proposed a package consisting of US$1 in cash and 0.4013 Curaleaf shares for each Aurora share. At the time, that proposal implied a value of about US$5 per share.
The competing bids leave Aurora investors with a clearer proposed exit value than they had during the earlier stages of the takeover contest, but the final result remains dependent on the transaction proceeding and on the applicable shareholder elections. For investors, the choice is not simply between two takeover prices: it also involves deciding whether to favour certainty through cash, continued market exposure through Organigram shares, or a blend of both.
The agreement marks a significant shift in the direction of Aurora Cannabis after the company's board turned away Curaleaf's hostile approach. Organigram's offer now becomes the central transaction under consideration, with the proposed C$7.80-per-share value and its three election structures forming the key terms available to shareholders in the reported deal.
What the proposed deal means for investors
- Transaction value: approximately C$561 million on a fully diluted equity basis.
- Board position: Aurora's directors approved the Organigram agreement after rejecting Curaleaf's hostile offer.
- Investor decision: shareholders can seek cash, Organigram shares or a combination, subject to proration for the first two alternatives.
