Summary
- Unbelievably bad offer by Green Growth Brands.
- A test of Financial Ignorance.
- Aphria remains tainted by alleged insider self-dealing.
Yesterday's supposedly unsolicited, unfriendly offer by Green Growth Brands (GGBXF) to acquire all the shares of Aphria (APHA) is ludicrous!Green Growth is offering shareholders of Aphria 1.5714 common shares of its stock for each share of APHA. GGBXF shares trade are so illiquid that is can euphemistically be said they trade on the CSE and OTC markets almost by appointment, while APHA now that trades actively on the NYSE. Green Growth went public via a reverse takeover of Xanthic Biopharma Inc. and only started trading on the CSE last month. On Bloomberg the CEO of Green Growth, Peter Horvath, strongly suggested they were willing to raise their bid.
The fact that APHA rose on the news is laughable, since shareholders were being offered shares more akin to wallpaper or toilet paper and no cash.
According to Green Growth's financial statements, it incurred losses of $516,344 on sales of $1.7 million during the September quarter;and, it did not have any revenue in the prior quarter. It has 223 million in fully diluted shares outstanding. GGBTF closed at $3.65 on December 27th on the OTC; therefore, its market capitalization is $813,950,000. By comparison, APHA's capitalization was $1.387 billion.
Aphria remains under a cloud of suspicion due to well publicized, alleged insider dealings involving its C$425 million Nuuvera acquisition as well as its C$280 million LatAm acquisitions Numerous class action lawsuits have already been filed against APHA and certain officers including its CEO Vic Neufield.
Maybe this unsolicited offer was concocted as a "stalking horse" offer to excite interest from buyers with the necessary wherewithal. For a more scathing analysis of this Green Growth offer see the following: https://seekingalpha.com/article/4230564-latest-act-aphria-circus-obviously-related-party-hostile-takeover-offer
