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Green Growth CEO dismisses doubts about their bid for Aphria
https://www.google.ca/amp/s/www.bloomberg.com/amp/news/articles/2018-12-28/green-growth-s-ceo-dismisses-doubts-about-bid-for-aphria-q-a
https://grizzle.com/aphria-let-the-bidding-begin/
BOTTOM LINE:
Grizzle pushed back hard since the release of the recent short report that Aphria was not a worthless stock and the hostile offer announced last night is a form of vindication.
Aphria has real value, the Green Growth offer makes that clear.
Given the current circumstances, this is the best outcome for shareholders, with Green Growth Brands, (CSE: GGB) effectively putting Aphria in play.
The short report and this hostile bid are forcing the hands of any consumer company’s waiting to enter the space.
Aphria is one of only two large, diversified cannabis growers still available for a consumer investment.
Aphria is unique, with the industry’s lowest growing costs and a globally diversified footprint to rival any competitor.
Consumer packaged goods company starved for growth will have to move now or lose Aphria to a competitor or other cannabis player.
If they want to enter the space later they will be paying much more than the $8.50/gram of funded capacity Aphria trades for today.
Constellation Brands valued Canopy Growth at $23/gram including warrants and Cronos took money from Altria at a $55/gram valuation so we know the Green Growth offer at $10/gram has simply set a floor for a more realistic bid.
Once a company is subject to a hostile bid all options are on the table, management no longer can determine the future of the company.
The only outcome that matters is the one that maximizes value for shareholders.
Recent M&A provides too much support for the company to end up being acquired for C$11/sh.
As shareholders, we call on Aphria to open up the data room and let consumer packaged good (CPG) companies see the true value of what you have built.
With more than 80% of shares held by public shareholders, they are in the driver’s seat and will demand the best price, regardless of whether it comes from a full company buyout or from a sale of the most valuable pieces by an activist.
The game is afoot.
DETAILS OF THE DEAL
News broke after market close yesterday that Green Growth Brands (CSE: GGB) will be initiating a hostile takeover for Aphria.
The deal would value Aphria at C$2.8 billion, a 45% premium to where the stock traded in the past 10 days.
Investors should keep in mind that the C$2.8 billion valuation uses a $7 share price for Green Growth which is much higher than the current stock price of $5.00/sh but in line with the pricing of a new C$300 million bought deal.
The real value of the deal is closer to C$2 billion or C$7.80/sh which implies $8.00/gram of funded capacity.
Further, if we use Green Growth’s average trading price before the stock runup, this deal is offering only C$5.50/sh for Aphria, far too low.
Green Growth is hoping a planned C$300 million capital raise will convince investors it is serious about acquiring and growing Aphria.
Aphria worth far more than C$2 billion.
On a fundamental basis the cashflow from Aphria’s Canadian greenhouses could be worth as high as C$15/sh on their own based on management guidance.
An acquirer would gain multiple international licenses and some greenhouses currently producing with others requiring minimal Canadian dollar CAPEX to complete.
Recent consumer company investments in the space imply Aphria is worth far more than C$15/sh.
Using deal comps from Altria and Constellation’s investments into Cronos and Canopy Growth, Aphria is worth $22-$54 per share based on funded Canadian capacity alone.
THE CLOCK IS NOW TICKING
The Green Growth offer has put consumer companies on the clock to the benefit of Aphria shareholders.
We as shareholders don’t care if value comes from a full buyout, equity investment or from an activist taking over the company and selling it piecemeal.
The bid from Green Growth has kicked off what we believe will be a series of near-term positive catalysts for the stock.
Regardless of how this story develops shareholders are better off now that Aphria is officially in play.
The irony for cannabis investors is that even if they bought Aphria the day before the release of the short report, they would still own a stock that performed in line with the broader cannabis index.
Now that Aphria is the only stock with public M&A catalysts, it is likely to continue outperforming the cannabis industry as a whole.
Let the bidding begin
https://grizzle.com/aphria-let-the-bidding-begin/
***Quinsam Capital owns 2.4M shares of Green Growth Brands.***
The plot thickens
http://www.quinsamcapital.com/pdf/investments.pdf
AKA Terry Booth of Aurora Cannabis.
Found on Facebook GGB page
Green Growth Brands Ltd now trading @ 5.04 long way from 7.00
https://mobile.tmxmoney.com/quote/?symbol=GGB:CNX
I do business valuations as my job... this is very basic but close
I know what a joke..... anyone who votes yes for this does not understand all the facts
My valuation
************
Aphria says they will be able produce in Mid 2019
255,000kg per year
=255,000,000 grams per year
Projected whole sale price per gram is $5.00/ gram
Projected sales gross @ 255,000,000 grams
= $1,275,000,000
All in cost & 1.50/gram
= $382,500,000
EDITBA calculation
$1,275,000,000. - $382,500,000. = $ 892,500,000 (EDITBA)
******
Earnings per share EBITDA
Outstanding shares 249,000,000
$892,500,000 / 249,000,000 = $3.58
*******
Projected share price at 8x EBITDA
= $ 28.64 CDN
= $ 21.03 US
I believe this may be conservative... if Aphria partners with Diageo and more international production occurs the revenue will be higher
GOING TO BE A GREAT GROWTH COMPANY!!!!!
https://corporatefinanceinstitute.com/resources/knowledge/valuation/ebitda-multiple/
https://www.inc.com/guides/2010/10/how-to-understand-earnings-or-ebitda.html
Yeah if you took this offer today
You would get 7.82 / share
Aphria closed today at 7.57
( what a joke )
Read this post that is on Reddit. Vote NO.
Discussion
APHA holders - you are NOT going to receive $11 per share. GGB is full of crap. Vote NO on this offer.
u/eddymark619
I've worked on several acquisitions before. Beyond the mumbo jumbo, here's what's happening. GGB is offering you 1.5714 of their shares for each of your APHA shares. This means that the actual amount of money you're going to receive depends on what GGB's share price does. Based on today's close, you'd be getting $7.83.
The only reason they are quoting that bullshit $11 per share offer is because they raised money and were valued at $7. THIS DOES NOT GUARANTEE THEY WILL REACH $7 AND YOUR APHA SHARES WILL SELL FOR $11.
Please pay close attention to the wording:
The Offer will provide Aphria shareholders with 1.5714 common shares of Green Growth (the “Green Growth Shares”) for each Aphria Share and represents premiums of 45.5% over Aphria’s closing price on the Toronto Stock Exchange (the “TSX”) on December 24, 2018 and 46.0% over Aphria’s volume weighted average price on the TSX for the last 10 trading days ended December 24, 2018. The Offer values Aphria at approximately C$2.8 billion (US$2.1 billion) based on a valuation of C$7.00 per share for Green Growth Shares.
Edit: Please stop calling this an “$11 takeover bid”.
Good luck after the dilution when having bought the Aphria shares
It dilutes GGB by 392,000,000
Presently GGB
The OS for GGB is 179,000,000
Market cap of 891 M
( what a joke offer)
Not sure how they get 11.00 Cdn as Green Growth is presently trading at 4.98 Cdn not 7.00
Ticker symbol GGB - 4.98 x 1.5714 = 7.825 cdn
Any one else see how we get 11.00 per share
Yes..... ask yourself why did Tilray announce this deal and not give an specifics as to the structure.... Hmmm
Wow that alone should give us a Hugh gap up on Monday
There activity has to have criminal implications.
https://business.financialpost.com/news/fp-street/canadian-regulators-put-companies-on-notice-over-problematic-promotions-in-sectors-such-as-cannabis-cryptocurrency#.XAxl9Gfs04I.facebook
Yes I agree.... I also believe they have been in a quiet period to establish price for the merger.
Golferman
Aphria - Broken Coast Cannabis (@brokencoastltd) wins for Top Reviewed Product of the Year. ?? #CanadianCannabisAwards
Congratulations to our friends at @brokencoastltd! This award further solidifies their reputation for producing outstanding cannabis products that patients, and now consumers, love. We couldn’t be prouder of their entire team. https://t.co/Q4tKNLYoEp
— Irwin D. Simon (@IrwinDSimon) November 30, 2018
Shoppers signed the first supply agreement with Aphria. Aphria was also very instrumental in helping Shoppers with the regulatory process with Health Canada.
Breaking: @ShopprsDrugMart gets its Federal Medical Sales Licence (FMSL) licence to sell #Cannabis Plants, Dried as well as Oils to Medical Patients (via mail order).
— Deepak Anand (@_deepakanand) December 7, 2018
NEWS JUST OUT - Shoppers Drug Mart, the largest Canadian pharmacy chain, received sales license for medical cannabis. APH has a supply agreement with Shopper's
Canada’s largest pharmacy.... more than 1,300 stores
Breaking: @ShopprsDrugMart gets its Federal Medical Sales Licence (FMSL) licence to sell #Cannabis Plants, Dried as well as Oils to Medical Patients (via mail order).
— Deepak Anand (@_deepakanand) December 7, 2018
I ****More pictures very impressive all I can say is WOW!!!!!***
Status of Aphria`s Phase IV, courteasy of Mr. Chris Mastronardi (thank you), please take a look.
Aphria produces more the Cronos which closed @ 17.00 CDN..... Aphria amazing automation have a look for yourself
https://m.imgur.com/gallery/9qWrXkt
Short seller Citron likes Aphria, sees 70% upside; shares up 7%
Dec. 7, 2018 11:41 AM ET|About: Aphria Inc. (APHA)|By: Douglas W. House, SA News Editor
Pot stock Aphria (APHA +7%) is up on robust turnover of almost 20M shares on the heels of Altria Group's 45% stake in Cronos Group.
Adding a bit of fuel to the buying is a bullish call from heretofore-short seller Citron Research who says Altria's action warrants a "rethink" on pot stock valuations, adding that APHA is a compelling candidate considering its large Canadian footprint and fair value target of $10 per share.
Just out now!!!!
https://seekingalpha.com/news/3415350-short-seller-citron-likes-aphria-sees-70-percent-upside-shares-7-percent
The Crons / Altria deal now leaves APHA really the only company left for Diagio to make a deal with that has production capability
A close above 7.38 would be very bullish for tomorrow
If you are short good luck...... hope you covered
WOW up over 40% CDN
I believe it will close making a new high for the day
Look for a big gap up tomorrow ..... as all those who are short will cover
It is not a large warehouse..... it is a large GREEN HOUSE owned by Aphria.
Should be in full production early 2019.... fully automated with robotics
Wrong
On the BNN interview today he would not say Aphria committed fraud ...
Maybe you should watch it again
All videos and pictures I have posted are current within the last few months.
They all show proof of the size of the Canadian business..... you can not dispute that
Video Aphria Diamond
***Aphria Diamond Pictures, WOW ****
The Canadian operation is HUGH....
255,000 KG/Yr
=255,000,000 grams per year
= 562,178.61 pounds/ year
Projected whole sale price per gram is $4.50/ gram
Projected gross sales @ 255,000,000 grams = $1,147,500,000
Here is a facebook post from Chris Mastronardi.... Chris and his brother are 49% owners of Aphria Diamond.
*********
Hello all , We are Aphria's Partner in leamington at
Aphria - Diamond , We are one of the largest greenhouse growers in Canada ( Double Diamond Farms ) , I can assure you being partners with Aphria on our JV that Aphria - Diamond and Aphria One facilities are on schedule and will be ready to be planted in Jan 2019 , just the 2 plants alone will produce in excess of 255,000 kgs annually , im not gonna get into all the internet keyboard war , what I can tell you is that Aphria is as real as they come and so are there farms , no LP in Canada will have anywhere close to the kind of technology and production capabilities per square foot of these two facility's , they are second to None and I can prove it any day of the week unlike these false claims you have read about there company , this is a pure Hit Piece on them to short there stock , Aphria is the lowest cost producer now and will continue to be going forward !
Chris.
Also below are some pictures provided by Aphria Diamond ( Chris Mastronardi )
Great read..... This post should be Stickied
John
Yes I know the Canadian operation in about 3 months will be producing 255,000 KG per year
That is 562,178.61 pounds/ year
****That is hugh****
Oversold - BUY Price projection Aphria $23.96 CDN or $17.92 US
******
Letter from Aphria Diamond
*****
Hello all , We are Aphria's Partner in leamington at
Aphria - Diamond , We are one of the largest greenhouse growers in Canada ( Double Diamond Farms ) , I can assure you being partners with Aphria on our JV that Aphria - Diamond and Aphria One facilities are on schedule and will be ready to be planted in Jan 2019 , just the 2 plants alone will produce in excess of 255,000 kgs annually , im not gonna get into all the internet keyboard war , what I can tell you is that Aphria is as real as they come and so are there farms , no LP in Canada will have anywhere close to the kind of technology and production capabilities per square foot of these two facility's , they are second to None and I can prove it any day of the week unlike these false claims you have read about there company , this is a pure Hit Piece on them to short there stock , Aphria is the lowest cost producer now and will continue to be going forward !
Chris.
******
This is a screaming buy NOW at these prices
These prices are a great buy..... Aphria will be producing 255,000 KG / Year of marijuana come 2019
255,000kg per year
=255,000,000 grams per year
Projected whole sale price per gram is $4.50/ gram
Projected sales gross @ 255,000,000 grams
Total Gross sales = $1,147,500,000
All in cost & 1.50/gram
Total Cost = 382,500,000
EDITBA
1,147,500,000. - 382,500,000. = 765,000,000
Earnings per share
Outstanding shares 249,000,000
765,000,000/ 249,000,000 = 3.07/Share
*******
Conservative Projected share price at 7.8 x EDITBA
$ 23.96 CDN
Letter from Aphria Diamond
*****
Hello all , We are Aphria's Partner in leamington at
Aphria - Diamond , We are one of the largest greenhouse growers in Canada ( Double Diamond Farms ) , I can assure you being partners with Aphria on our JV that Aphria - Diamond and Aphria One facilities are on schedule and will be ready to be planted in Jan 2019 , just the 2 plants alone will produce in excess of 255,000 kgs annually , im not gonna get into all the internet keyboard war , what I can tell you is that Aphria is as real as they come and so are there farms , no LP in Canada will have anywhere close to the kind of technology and production capabilities per square foot of these two facility's , they are second to None and I can prove it any day of the week unlike these false claims you have read about there company , this is a pure Hit Piece on them to short there stock , Aphria is the lowest cost producer now and will continue to be going forward !
Chris.