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Is Aphria Really a ‘Failed Investment’ as Green Growth Indicated

Green Growth’s selling points

While addressing Aphria’s (APHA) shareholders, Green Growth’s press release highlighted the synergies the two companies can create following the takeover. Green Growth specifically highlighted the “U.S. market, with significantly greater long-term sales potential.”

Green Growth's Premium on Aphria 2019-01-06

Green Growth put a value of 2.8 billion Canadian dollars ($2.1 billion) or 11 Canadian dollars per share. This price represents a premium of roughly 45% over its closing price of 7.6 Canadian dollars per share on December 27.

Failed investment?

In the same press release, Green Growth stated that it has received early interest from “frustrated” Aphria shareholders in favor of this takeover. Green Growth further stated that these shareholders “want a way out of a failed investment.” However, one important consideration in this takeover bid for investors to consider is the validity of the claim that Aphria is a “failed investment.” After all, if this were the case, why would Green Growth pay a 45% premium for the company?

In the next part, we’ll discuss what Green Growth values about Aphria and why these things would make other Canadian cannabis (MJ) players such as Canopy Growth (WEED) (CGC), Aurora Cannabis (ACB), and Cronos Group (CRON) attractive.

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