Its capped at $24/share the way I read the offer and with the chart they provided in this link on Page 2 in the offer.
Clearly you get less AURORA shares the higher the price of Aurora is I assume.
For example if Aurora price is 6 your get 4 Aurora shares for each CMED share. IF price is 6.25 then you get 3.84 shares of Aurora for each CMED, if Aurora price is 6.50 you get 3.69230769 shares of aurora for each CMED. So even if Aurora is $7 a share you would get 3.4285714 shares of Aurora for each CMED share. It is a NO BRAINER to me. I am anxious to hear why any CMED share holder is against the idea?
hello Bigman...My understanding of the share exchange is somewhat different. It appears there may be mix up of two currencies in your calculations, USD and Canadian dollars.
ACB Friday closing PPS on TSX = $7.52
CMED Friday closing PPS on TSX = $19.00
Terms of share exchange = 1 CMED = 4.525 ACB Then 1 CMED share holder gets = $7.52 X 4.525 = $34 value.
If the offer is accepted today: current PPS premium accruing to CMED shareholder per share = $34 - $19 = $15 0r about 79% premium. The trick here is as long as the 20 day VWAP of Aurora's share on TSX doesn't exceed $5.30, the share exchange ratio holds. If it does, the ratio of share exchange will reduce accordingly and subject to a cap price of $24 Canadian.
Terms of the Offer
"The Offer will provide holders of CanniMed Shares with 4.52586207 Aurora Shares for each CanniMed Share, subject to a maximum of $24.00 (the "Cap Price") in Aurora Shares. If, on the earlier of the expiry time of the Offer and the date on which all conditions to the Offer have been satisfied, the 20-day volume weighted average price (the "Calculation Date VWAP") of Aurora Shares traded on the TSX is greater than $5.30 per Aurora Share, the number of Aurora Shares that a holder of CanniMed Shares will receive will be calculated by dividing the Cap Price of $24.00 by the Calculation Date VWAP."
My two cents, I could be off base here but this is how I see it.
Disclosure: My posts are just my opinion, not intended for investment advice. I am often wrong in my analysis, hence do your own DD to decide if you want to buy/sell/hold etc.