A short seller's report raising concerns about Aphria's acquisitions in Latin America isn't worrying the company launching a hostile takeover of the Leamington-based pot producer.
Speaking to BNN Bloomberg, Green Growth Brands CEO Peter Horvath says Aphria is handling the concern adequately.
"Those issues we obviously aren't in a position to understand or comment on," says Horvath. "It's overhang that we would be concerned with just as anyone else is concerned with. We feel that their governance process with a special committee is addressing that."
Horvath says the company has created great value in its Leamington grow operation and has launched a hostile bid to combine the companies with an offer of $11 per share. A previous friendly offer was rebuffed by the Aphria board.
The offer values Aphria at $2.8-billion (CA).
"You know I've seen their grow operation — it looks amazing," says Horvath.
He thinks greater value can be created by a new company with roots on either side of the border.
"We think Aphria represents an excellent asset. More importantly, we want to combine the companies — our company and theirs — and leverage the management teams across the border," says Horvath.
If the deal is approved, it would create one of the largest cannabis companies in the world — producing 250 kilograms of marijuana in Canada and establishing a retail presence in Nevada.
Horvath says the takeover doesn't mean current Aphria CEO, Vic Neufeld, would be ousted.
"I think that's to be determined by the resulting board after the combination," says Horvath. "Right now the scenario we're looking at, Aphria shareholders would own 60% of the resulting company so, ultimately it would be their decision."
Aphria's shares plunged as much as 52% earlier following the December 3 short report, but rebounded as much as 33% since.
Green Growth Brands is based in Columbus, Ohio.