Aphria Inc. (TSX:APHA) (NYSE:APHA), one of Canadian marijuana stocks, announced the findings of the board’s review of the LATAM acquisition on Friday
SmallCapPower | February 19, 2019: Aphria Inc. (TSX:APHA) (NYSE:APHA), one of the Canadian cannabis stocks, Friday reported the findings of a special review of its governance procedures. The review was conducted by legal advisor Lenczner Slaght Royce Smith Griffin LLP, independent forensic advisors Deloitte LLP and independent financial advisors Duff & Phelps Canada Limited. The Company said on Friday that the assets acquired in the LATAM transaction were within the acceptable range, albeit with in the top end of observable valuation metrics. Comprehensive, in-person site visits were shepherded by the Special Committees and confirmed that the assets in Jamaica, Columbia, and Argentina, did exists and were currently operational. Aphria will test the assets for impairment on an annual basis under IFRS reporting requirements.
Aphria also said that it will adopt better corporate governance practices to manage conflicts of interest, after it found that certain non-independent directs had conflicts of interest that were not fully disclosed. Vic Neufeld, Cole Cacciavillani, and John Cervini, will step down as directors effective March 1, 2019. Irwin Simon was appointed as Aphria’s interim CEO, and will work closely with President Jakob Ripshtein, until the board finds a new CEO. The board of directors has committed to be fully composed of independent directors, once the new CEO has been appointed.
The restructuring comes as Aphria is in the middle of a hostile takeover attempt by Green Growth Brands Inc. (CSE:GGB), which was first revealed on December 28, 2018. Aphria had rejected the offer in early February, claiming that it significantly undervalues the Company.
Shares of Aphria ended Friday up 5% at C$12.68. Aphria Inc’s stock trades at a market cap of C$3.2 billion.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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