Green Growth apparently failed to consider the promising growth opportunities presented by Aphria which led to the rejection of the bid.

Aphria Inc., the Canadian cannabis company, has recently been reported to officially reject the hostile takeover bid presented by Green Growth Brands Inc., a US-based marijuana company.

Irwin Simon, Chairman, Aphria, has been reported in an official press release to say that the Aphria Board of Directors have unanimously voted against GGB's takeover offer which has been considered inadequate and significantly undervalued besides being not in the best interest of Aphria shareholders on various basis. He added that GGB is offering shares in a company that is not only illiquid but has limited operating history, no-existent track record as far as the cannabis industry is concerned and minimal assets.

According to reliable sources, Green Growth Brands offered 1.5714 of its shares against each share of Aphria. But Arphia is of the opinion that there is no certainty that GGB would be able to fund the capital requirements of the combined company.

According to the Business Insider, Simon went on to say that Aphria’s competitive advantages and strong platform has made it possible for the company to have multiple near-term opportunities that will help it to grow profitably and create substantial value for its shareholders. Such opportunities include expanding in the global medical-use market, automation to secure scale advantages and long-term cost and acquisition of increased market share besides developing new products for the health sector. Apparently GGB’s hostile takeover bid completely overlooked such promise for the future which led to the Aphria Board rejecting the bid altogether.

Green Growth representative had been reported to say that the company will respond to the rejection in due course. Reportedly, financial analysts do not find the rejection surprising.

For the record, the takeover bid was due to expire on May 9, 2019 and was submitted in January 2019. Arphia had till February 7 to respond to the bid.

After the submission of the offer, reports suggest that Aphria recommended its shareholders to delay tendering till an independent committee of directors were available to advise the full board.