A producer of medical marijuana, CanniMed, is in talks with Newstrike Resources about linking the two companies. News of the proposed mergers and acquisitions deal came to light after a competing company, Aurora Cannabis, tried to take over the Saskatchewan-based CanniMed. The company, which has the backing of the Canada band, The Tragically Hip, said it is in talks with Newstrike about penning a deal.
If the merger is successful, for every 100 shares Newstrike shareholders have, they will get 3.3 shares in CanniMed. The Aurora Cannabis unsolicited takeover attempt was not given a very warm reception by CanniMed. The company asked its shareholders to give them time to consider Aurora's offer prior to tendering their shares.
According to Aurora, an all-share deal with them could net CanniMed shareholders up to $24 a share and give them the backing of CanniMed shareholders to the tune of 38 percent of their outstanding shares. In the meantime, the price of Newstrike's shares was down more than 16 percent at recent trading. CanniMed's share was down 5.5 percent on the Toronto Stock Exchange.
Mergers and acquisitions are generally very complex to understand and could use the advice of a lawyer who is experienced in such issues. A lawyer in Canada would be able to assist his or her client in the understanding of the legalities behind mergers and acquisitions and will have the savvy to structure a transaction on behalf of his or her client. A lawyer can be helpful in many areas in these instances: acquisition financing, takeover bids, spinoffs and such.
Source: thefinancialpost.com, "Tragically Hip-backed Newstrike confirms merger talks with CanniMed", Jonathan Hayward, Nov. 16, 2017