Aphria stock is down at the time of writing. Selling for $7.39 USD on the NYSE, shares have continued to decline since Aphria Inc (TSX:APHA) (NYSE:APHA) released its Q3 fiscal 2019 report on April 15. The same day, it was announced that the Green Growth Brands (CSE:GGB) take-over bid expiry date was being brought forward.
Aphria Stock Decline
GGB first made a bid for Aphria back in late December—it formally launched a tender offer for the company valuing it at $11 CAD per Aphria stock or $2.8 billion. This represented a 45.5% premium on the company’s then share price and the offer was rejected.
One month later, Green Growth made a second all-stock hostile bid for Aphria. This time it valued the company at $2.35 billion CAD and the offer period was to be open until May.
Aphria Inc urged shareholders to reject the offer, calling it highly opportunistic on GGB’s part. Of course, GGB called for investors to consider the hostile takeover bid.
But the saga ended suddenly when on April 15, the companies agreed to shorten the expiry time of the offer from May 9 to April 25.
April 25 came and went with no deal signed. As such, the take-over bid was officially terminated.
Aphria Stock Decline
GGB was intent on taking over Aphria Inc. So perhaps its sudden bow out was related to Aphria’s poor Q3 results.
Overall, the company showed a net loss of $108.2 million CAD, mirrored against a net income of $12.94 million. Further, earnings per share came in at a loss of 20 cents CAD. This is hard to fathom when you consider that a year ago, EPS was plus 8 cents CAD. Aphria stock plummeted 15% on that day.
But for several days after, APHA has continued to plummet. Now, it has lost roughly 30% from its 2019 highs in early February.
On the contrary, GGB has seen a surge in stock value in the same period. Shares have packed on over 25% since April 15 as investors clearly get behind the company’s decision to leave Aphria to its own devices. At the time of writing, GGB shares are valued at $4.98 on the CSE, up over 10%.
Do you think Aphria should’ve considered the original takeover offer? Can Aphria stock rebound from this patch? What are your thoughts?
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