(Reuters) - Medical marijuana company CanniMed Therapeutics Inc has asked Canadian regulators to intervene as it seeks to prevent a hostile takeover by bigger rival Aurora Cannabis Inc.
Saskatoon, Saskatchewan-based CanniMed said on Monday it asked the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission to declare that Aurora’s move to take its buyout offer directly to CanniMed shareholders constituted an insider bid.
An insider bid is a takeover offer made by a company insider or their affiliates within a year before the bid. Canadian securities laws demand disclosure, review and approval processes in the event of such a bid to protect minority shareholders.
CanniMed said SaskWorks Venture Fund Inc, Apex Investments LP, Golden Opportunities Fund Inc and Vantage Asset Management Inc - its “locked-up” shareholders - acted jointly with Aurora.
Alberta-based Aurora offered to buy CanniMed last month but CanniMed adopted a plan to prevent shareholders from entering agreements with Aurora, viewing the deal to be “coercive.”
“We had hoped to make this a friendly and collaborative process, but Mr. Zettl (CanniMed CEO Brent Zettl) refuses to even pick up the phone or return our calls to have a discussion,” Aurora said on Monday in response to CanniMed’s move.
Aurora has sought acquisitions to expand in Canada and abroad amid expectations that Canada will soon legalize the production, sale and consumption of recreational marijuana.
Shares of CanniMed, which were down about 1 percent on the Toronto Stock Exchange on Monday morning, have risen 28 percent since Aurora made its offer on Nov. 14.
Reporting by Yashaswini Swamynathan and Taenaz Shakir in Bengaluru; editing by Sai Sachin Ravikumar