Aphria Inc (TSX:APHA) Targeted with Takeover Attempt by U.S. Company
Aphria Inc (TSX
The deal involves no cash (of course) and would be a trade of shares. Aphria shareholders would get about 1.57 shares of Green Growth in exchange for one of their shares. It amounts to around $11 per share for
It sounds great, except that
Given that Aphria could recover from this, investors might not want to jump over this deal just yet. After all, with the U.S. legalizing hemp-derived cannabidiol, we could see more U.S. companies getting involved in the cannabis industry. That means there could be more potential suitors for Aphria in the weeks and months to come.
All in all, the timing couldn’t be worse for Aphria investors to take this deal. The stock is at a low, and the “premium” would be nowhere near the stock’s 52-week high.
I’m not convinced that pot stocks won’t see another boom, especially once edibles get legalized sometime during 2019. There’s still plenty of hype that could send Aphria back up in price, making this a bad deal for shareholders today.
Jim Dibble has no position in any of the stocks mentioned in this post. This post is only an individual opinion and investors should not use or rely on it when making a decision to buy the stock.