HIKU approves acquisition by WEED
Hiku Brands (CSE: HIKU) shareholders passed a resolution to approved the previously announced plan of arrangement with Canopy Growth (TSX: WEED) that will result in WEED acquiring 100% of HIKU. Under the terms of the plan, each HIKU shareholder will receive 0.046 of a Canopy share. At a recent price of $59.64 for WEED, each HIKU share has an approximate value of $2.74 per share, an increase of over 40% since the plan was first announced in July. When the deal was first struck, Canopy was paying approximately $250 million for Hiku, the parent company of Tokyo Smoke. Hiku has paid WeedMD a $10 million termination fee related to a previous offer. It is expected that HIKU will be delisted immediately.
We believe this is an excellent acquisition for Canopy. Hiku’s strengths are branding, marketing and retailing which meshes well with the rest of Canopy’s operations. Hiku is expected to have over 20 retail licenses by year and. Rack this up as another win for Canopy shareholders (see full report here).