Two Canadian regulators asked CanniMed Therapeutics Inc. to drop the shareholder rights plan it adopted amid an unsolicited takeover offer from Aurora Cannabis Inc.
The Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission also rejected CanniMed's request to consider Aurora's buyout offer as an "insider bid," and denied Aurora's request to shorten the deposit period for its acquisition offer for CanniMed.
In November, Aurora offered to acquire CanniMed for C$24 per share, but CanniMed's board adopted a shareholder rights plan in response to the bid, calling it "unsolicited" and "opportunistic."
Aurora recently opposed CanniMed's plan to buy Newstrike Resources Ltd., calling it a "terrible deal."
The regulators ordered Aurora to provide additional disclosure regarding information that could affect CanniMed shareholders' decision to accept or reject the offer.
Commenting on the matter, CanniMed said Aurora's attempt to reduce the minimum bid period was "inappropriate and clearly an attempt to pressure CanniMed shareholders into tendering to the coercive hostile bid by unfairly shortening the statutorily required bid period."
Brent Zettl, CanniMed's president and CEO, believes the Newstrike acquisition remains an excellent opportunity for the company and its shareholders. He said the deal is "clearly superior to Aurora's inadequate hostile bid that offers phantom value based on an inflated Aurora share price."
"Aurora has secured key legal victories that take us a big step forward towards acquiring CanniMed, and integrating its team and operations into our organization to further build the preeminent global cannabis company," said Aurora CEO Terry Booth.
Booth said the CanniMed-Newstrike transaction is a "bad deal that will destroy considerable value for CanniMed's shareholders." He added that CanniMed shareholders are now "freed from CanniMed management's efforts to take away their fundamental right to support the superior opportunity."