December 28, 2018 / 12:28 PM / 2 years ago

Aphria says Green Growth's proposed hostile bid undervalues company

Dec 28 (Reuters) - Canadian cannabis producer Aphria Inc said on Friday that Green Growth Brands Ltd’s proposed C$2.8 billion ($2.06 billion) all-stock hostile bid undervalued the company.

U.S. cannabis retailer Green Growth said on Thursday it would offer 1.5714 shares for each Aphria share, representing a premium of 45.5 percent over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24. The offer is based on a valuation of C$7 per Green Growth share.

Aphria said on Friday Green Growth’s offer is “based on a hypothetical valuation of its own shares, with no relation to the current price.”

In an emailed statement, Green Growth Chief Executive Officer Peter Horvath said the offer would create value for shareholders of both companies.

“Together, we can unleash synergies between our teams, assets and geographies, forming a combined enterprise that will accelerate our collective growth strategies in Canada, the U. S. and overseas,” Horvath said.

Aphria’s U.S.-listed shares surged 17.2 percent to $6.53 in premarket trading. ($1 = 1.3599 Canadian dollars) (Reporting by Debroop Roy in Bengaluru; Editing by James Emmanuel)

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