CanniMed Therapeutics Inc. says a leading independent advisory firm has recommended its shareholders vote in favour of its proposed acquisition of Newstrike Resources Ltd., a deal that hostile suitor Aurora Cannabis Inc. wants quashed.
Institutional Shareholder Services Inc. says that acquiring Toronto-based Newstrike (TSXV:HIP) would allow Saskatoon-based CanniMed (TSX:CMED) to access the recreational cannabis market while also significantly expanding its production capacity and diversifying its geographic footprint.
The advisory firm also says that Aurora’s all-stock hostile takeover bid for CanniMed, capped at a $24 per share offer, has effectively halved the exchange ratio and CanniMed’s expected ownership stake in the combined entity.
Aurora (TSX:ACB) formally launched its hostile takeover bid for CanniMed in late November on the condition that CanniMed cancel its acquisition of Newstrike and said its offer will remain on the table until March 9.
CanniMed said earlier this month that Aurora was offering shares that were worth only half as much just two weeks before its hostile bid was announced last fall and that it is inferior to its own proposed acquisition.
CanniMed shareholders vote on the proposed acquisition of Newstrike on Jan. 19.