BREAKING: Canopy Growth to acquire shares of Hiku Brands
Canopy Growth (NYSE: CGC) (TSX: WEED) has entered into a definitive arrangement agreement to acquire all the issued and outstanding shares of Hiku Brands (CSE: HIKU). Hiku shareholders will receive 0.046 of a Canopy Growth common share for each common share of Hiku or the equivalent of C$1.91 per Hiku share and a premium of 33% based on the 20-day volume weighted average prices of the Canopy and Hiku shares and a premium of approximately 21% based on the closing prices of the Canopy shares on the TSX and the Hiku shares on the CSE on July 9, 2018.
An interesting feature of this transaction is that HIKU had made an offer for WeedMD (TSXV: WMD) that would have made HIKU shares and WMD shareholders virtually equal partners (51.75%/48.25%). This potential deal was still outstanding and carried a $10 million break fee if the transaction didn’t go through. Assuming the CGC offer succeeds, WMD shareholders will receive the fee.
This offer could also stand as a case in business schools across the country. No hostility. No nasty accusations by the parties involved. No outrageous takeover premiums. It’s just another example of why Canopy Growth will be one of our favorites in the cannabis industry for some time to come and why HIKU shareholders will likely approve the transaction.