Canadian shareholder buys Aussie pot stock Creso Pharma for $122m
Health & Biotech
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ASX pot stock Creso Pharmaceuticals (ASX:CPH) is being acquired by a new Canadian shareholder for $122m.
The deal marks the first takeover among Australia’s listed medical cannabis companies.
PharmaCielo, a $C723m TSX-listed medical cannabis company, is buying the Europe-focused human and animal medical cannabis business for 63c a share.
The price is an 86 per cent premium on the 41.5c close on Thursday evening.
The board is recommending shareholders accept the offer, although it will mean Australian holders will now own 13 per cent of PharmaCielo in Canada rather than cash out immediately.
Creso shareholders will receive 0.0775 PharmaCielo shares for every Creso share, while optionholders will receive 0.0185 PharmaCielo shares for each Creso listed option, worth 15c each.
An Australian court will need to approve the deal, which is being done via a scheme of arrangement.
Creso CEO Dr Miri Halperin Wernli will become a director of PharmaCielo.
Creso listed in Australia in 2016, shortly after medical cannabis was legalised here, and specialises in using the whole plant to order to engage the ‘entourage effect’.
It was focused on selling human and animal cannabidiol nutraceutical products into European countries, but has since expanded to Latin America and Australia and owns a medical cannabis facility in Canada.
PharmaCielo bought into Creso in April, when the smaller company raised $5.35m in secured loans. It has promised to issue $3.5m in bridging loans while the acquisition is being finalised as per that agreement.
It somewhat justifies widespread speculation that potential acquirers of Australian pot stocks will be the heavyweight Canadian shareholders already on their registers.
Other companies with major Canadian shareholders include:
– Cann Group (ASX:CAN), where global number two Aurora owns 23 per cent
– global number one Canopy Growth owns 11 per cent of AusCann (ASX:AC8)
– Aphria owns 25 per cent of Althea (ASX:AGH)