November 29, 2017 2:05 pm

CanniMed adopts shareholder rights plan in hostile takeover bid by Aurora Cannabis

Saskatoon-based CanniMed has adopted shareholder rights plan in an attempt to thwart a hostile takeover bid by Aurora Cannabis.

File / Global News

CanniMed Therapeutics Inc. says it has adopted a shareholder rights plan in a bid to defend itself against a hostile takeover offer by Aurora Cannabis Inc.

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The Saskatoon-based company says the move will ensure its shareholders have a chance to vote on its own acquisition of Newstrike Resources Ltd. (TSXV:HIP).

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

The rights plan prevents Aurora from acquiring any CanniMed shares other than those tendered to its hostile bid or from entering into any lock-up agreements other than those it has already signed and filed, CanniMed said.

Aurora (TSX:ACB) has made an all-stock offer for CanniMed worth up to $24 per share, with one of its conditions being that CanniMed abandon its own proposed acquisition of Newstrike.

Aurora has also said that it has signed lock-up agreements with four CanniMed shareholders – which comprise 38 per cent of outstanding shares – to support its unsolicited takeover bid.

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

CanniMed (TSX:CMED) has said the Aurora acquisition does not make sense for its shareholders, but the combination with Newstrike will deliver significant shareholder value.

© 2017 The Canadian Press

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