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Saskatchewan funds, Toronto investment manager back Aurora-CanniMed takeover bid

Legalizing marijuana for recreational use in Canada
Aurora Cannabis’s hostile takeover bid for CanniMed Therapeutics includes the backing of two Saskatchewan venture capital funds. Ron Ward/Canadian Press

Aurora Cannabis Inc.’s all-stock hostile takeover bid of medical marijuana company CanniMed Therapeutics has the backing of a Toronto-based investment manager, two Saskatchewan venture capital funds, and an investment fund also based in the prairie province, according to regulatory filings.

Shares of Aurora (TSX:ACB) were up as much as 16 per cent in late afternoon trading after the Vancouver-headquartered marijuana producer officially launched its bid on Friday, while shares of Saskatoon-based CanniMed (TSX:CMED) slipped as much as 3 per cent by early afternoon in Toronto.

READ MORE: Aurora Cannabis formally launches hostile takeover bid for CanniMed Therapeutics

Aurora signed lock-up agreements with four CanniMed shareholders – which comprise 38 per cent of outstanding shares – on Nov. 13 to support its unsolicited takeover bid, one day before it made its proposal public, according to a circular outlining its offer.

These four institutional shareholders are Golden Opportunities Fund Inc. with a 17.33 per cent stake, Saskworks Venture Fund Inc. with 8.42 per cent, Apex Investment Limited Partnership with 3.48 per cent and Toronto’s Vantage Asset Management holding 8.71 per cent, filings show.

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Aurora formally launched its takeover bid with a newspaper ad and circular detailing its offer to acquire all issued and outstanding shares for up to $24 each, with one of its conditions being that CanniMed abandon its own proposed acquisition of Newstrike Resources Ltd. (TSXV:HIP)

READ MORE: Shareholders told to wait while CanniMed reviews Aurora offer

CanniMed said Friday that Aurora’s acquisition does not make sense for its shareholders, but the combination with the Tragically Hip-backed Newstrike is poised to deliver significant shareholder value.

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