For a second time, cannabis company Aphria Inc. (TSX: APHA) has officially turned down an unsolicited buy offer from Green Growth Brands (CSE: GGB).
Despite that announcement, Green Growth continues to show interest in acquiring its competitor, issuing the following statement after receiving the latest rejection from Aphria’s board of directors:
Green Growth’s first hostile takeover attempt arrived shortly after a negative short seller report was released in December through Quintessential Capital Management and Hindenburg Research.
That report caused Aphria’s stock to fall sharply, but since then has fully rebounded, now rising above the price when the report was first released.
Quintessential Capital Management has additionally moved away from negative claims about Aphria following an announcement that CEO Vic Neufeld and co-founder Cole Cacciavillani will step down from their roles at the company, although both will remain on the board of directors.
We welcome the latest executive changes at Aphria which clearly vindicate our short thesis. With a new management team the company has a chance to a brighter future and we are accordingly moving on to new projects.
— Quintessential Capital Management (@QCMFunds) January 11, 2019
After that report was released, Irwin Simon was appointed as Aphria’s new independent board chair to look into the company’s recent dealings.
Six weeks into his tenure on the board, Simon appeared for an interview with BNN Bloomberg to discuss the company’s rejection of the GGB offer, stating he believes shareholders agree with the decision.
Simon further stated his position that it’s the wrong time to consider a sale or merger when shortages continue to strangle the market and more value is on the horizon as Health Canada hands out additional licenses.
During that interview, the BNN Bloomberg interview team noted that a promised line-by-line rebuttal to the Hindenburg short seller report hasn’t yet materialized, with Simon stating the company’s internal report will be made available “very shortly.”
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