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Aurora Cannabis Inc. led a rally of cannabis stocks on Wednesday after the company announced the hiring of hedge fund manager Nelson Peltz as an advisor to seal new deals and grow worldwide.
The stock
CBA + 9.92%
CBA + 9.96%
jumped 12.5% in the first exchanges. Peltz, founder of Trian Fund Management LP, is a well-known advocacy investor who has led campaigns to change the management and operations of many companies, including Procter & Gamble Co.
PG, + 0.98%
former DuPont and Dow Chemical, recently merged as DowDuPont Inc.
DWDP, + 0.92%
and General Electric Co.
GE, + 0.92%
He is president of the Wendy's Co. fast food chain.
MAGNIFYING GLASS, + 0.55%
and currently sits on the boards of P & G, foodservice giant Sysco Corp.
SYY, + 0.36%
and Madison Square Garden Co.
MSG + 0.26%
Owen Bennett, an analyst at Jefferies, said the news supports his vision of Aurora, well positioned to become a global leader in the sector.
"Some investors have hesitated in Aurora's investment record because they have spent large amounts of money on many assets throughout the value chain, without knowing which ones are best suited." Bennett wrote in a note to customers. "Peltz should ensure that the most profitable assets are kept. Given its past, we also suggest that its involvement should help maximize the path to profitability. "
Jefferies has a purchase quote on the Aurora stock and a $ 12 price target, about 13% higher than its previous session closing price.
Peltz will be awarded options to purchase 19.9 million common shares of the company at C $ 10.34 ($ 7.74) the action. The options will vest over a four-year period on a quarterly basis and the acquisition could accelerate if the Company achieves certain objectives, including the completion of certain defined transactions and the share price being at least 31, CA $ 02 and CA $ 41.36 for a specific contract. number of trading days.
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Hexo Corp. Shares
hexo, + 5.73%
hexo, + 7.03%
rose 3.9% after the Quebec company announced its agreement to acquire its smallest rival, Toronto-based Newstrike Brands Ltd.
NWKRF, + 12.00%
HIP, + 11.11%
in a 100% equity transaction valued at approximately 263 million Canadian dollars. Newstrike shareholders will receive 0.06332 Hexo shares for each Newstrike share held. Both boards have approved the agreement, which must now be approved by shareholders.
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The agreement will give Hexo an additional capacity of around 150,000 kg of cannabis a year and diversify its distribution in the domestic market. The combined companies will have agreements in 8 Canadian provinces, including Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia and Prince Edward Island. The companies expect to generate annual synergies of $ 10 million. Hexo expects to generate net revenues of $ 400 million from cannabis sales in Canada for fiscal year 2020.
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"We expect this to be taken positively with the addition of a strong leisure brand, but we reiterate the concerns regarding the valuation of Hexo with question marks in relation to d & # 's 39, other areas of the company and validating its strategy as an ingredient supplier, "said Bennett Jefferies. written in a note.
The Hexo stock has gained 67% in 2018 so far.
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Chelsea Handler, comedian, author, and activist, became an investor in Civilized, a digital content provider that aims to create brands and events in the cannabis industry.
"Cannabis has made a difference in my life, in the lives of my friends and the people who have been reintroduced," Handler said in a statement. "Working with Civilized, I saw how passionate they were about destroying outdated stereotypes of cannabis while entertaining people, which was a real inspiration."
Acreage Holdings Inc. Shares
ACRGF, + 0.31%
rose 0.9% after a net loss of $ 217.6 million in the fourth quarter, or $ 2.63 per share, compared with a loss of $ 4.8 million in the same quarter of the same quarter. Previous exercice; the company has not released a figure per share from the previous year.
The New York-based company said its revenue was $ 10.5 million, up from $ 2.2 million for the same period last year. The company does not have enough analyzers for FactSet to provide accurate consensus estimates. Acreage has not published financial tables with its results nor comprehensive management report.
Elsewhere in the area, Tilray
TLRY, -0.34%
down 1.2%, Canopy Growth Corp.
GSC -1.86%
CANNABIS, -1.41%
down 0.7% and Cronos Group Inc.
CRON, -1.40%
was down 0.6%.
But Green Organic Dutchman Holdings Inc.
TGODF, + 1.97%
tgod, + 1.63%
was up 0.9%, CannTrust Holdings Inc.
CTST, + 0.11%
TRST, + 0.34%
was up 1.1% and MedMen Enterprises Inc.
MMNFF, + 2.71%
was up 2.6%.
Horizons Marijuana Life Sciences ETF
HMMJ, + 0.68%
up 1.4% and ETFMG Alternative Harvest ETF
MJ + 0.36%
was up 1.6%.
The S & P 500
SPX, + 0.79%
up 0.5% and the Dow Jones Industrial Average
DJIA, + 0.59%
was up 0.4%.
Additional report by Max Cherney in San Francisco
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