(Reuters) - Medical marijuana maker CanniMed Therapeutics Inc (CMED.TO) should withdraw a shareholder rights plan adopted to fend off a hostile bid from larger rival Aurora Cannibis Inc ABC.TO, two Canadian regulators have ruled.
The Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission also denied Aurora’s request to shorten the deposit period for the offer to 35 days from 105 days.
Alberta-based Aurora offered to buy CanniMed for C$24 per share in Nov. 24, but within days CanniMed adopted a shareholder rights plan, or a “poison pill”, viewing the offer as “coercive”.
Earlier this month, CanniMed approached the regulators to declare Aurora’s decision to take the buyout offer directly to CanniMed shareholders as an insider bid.
The regulators also rejected CanniMed’s request to consider the offer as an insider bid.
An insider bid is a takeover offer made by a company insider or their affiliates within a year before the bid. Canadian securities laws demand disclosure, review and approval processes in the event of such a bid to protect minority shareholders.
CanniMed’s shares were up 5 pct at C$20.93 in early morning trade, while those of Aurora rose 7 pct to C$7.72.
Reporting by Taenaz Shakir in Bengaluru; Editing by Sriraj Kalluvila