This morning, Aphria Inc. (TSX:APH) (OTC:APHQF) announced that it has entered into an amending agreement to the previously announced arrangement agreement with Nuuvera Inc. (TSXV:NUU) (OTC:NUUVF).
The two companies have agreed to amend the Arrangement Agreement to reduce both the required level of unrestricted cash and the consideration payable to holders of Nuuvera's common shares. The consideration under the Amendment has been reduced from $1.00 CAD in cash plus 0.3546 of an Aphria common share for each Nuuvera share to $0.60 CAD in cash plus 0.3546 of an Aphria share for each Nuuvera share.
This offers substantial savings for Aphria, while cutting back payables to Nuuvera shareholders measurable.
Aphria had previously announced in connection with the Arrangement Agreement that it had secured irrevocable hard lock ups from Nuuvera shareholders representing more than a majority of both the currently outstanding Nuuvera Shares and the "minority" Nuuvera shareholders to vote in favor of the Arrangement Agreement. In connection with the Amendment, Aphria has sought and received consent from Lock-Up Shareholders that, together with Nuuvera Shares already owned by Aphria, represent approximately 65% of the currently outstanding Nuuvera Shares and over 57% of the requisite minority shareholders of Nuuvera, to the reduction of consideration under the Arrangement Agreement.
In connection with the Amendment, the board of directors of Aphria received an opinion from its financial advisor, Cormark Securities, that, as of February 19, 2018, and subject to the assumptions, limitations and qualifications on which such opinion is based, the consideration to be offered by Aphria in respect of the Arrangement, as amended by the Amendment, is fair, from a financial point of view, to Aphria.
The completion of the transaction contemplated under the Arrangement Agreement and the Amendment is not expected to be delayed and the transaction is expected to close in April, 2018.
It should be noted that in the Frankfurt session yesterday, shares of Aphria traded up 0.27€ or 2.97% to 9.35€, which is equivalent to roughly $14.57 CAD or $11.60 USD per share. For perspective, shares of Aphria closed the Friday session in Toronto trading at $14.06 CAD per share.
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