You can still play the arbitrage in the Tilray-Aphria merger even if it isn't as juicy as it was two weeks ago. Anytime a company, or companies, are in a position to cut down on that, to combine assets, to rationalize like that, that's a positive development. Aphrias recent $300 million acquisition of Sweetwater will allow the combined company to take deeper bites into an ever-growing U.S. market. quotes delayed at least 15 minutes, all others at least 20 minutes. All products available for purchase through this website are intended for hemp-derived products with less than 0.3% concentration of THC by dry weight, as well as other legal herbs. The spread has since narrowed to less than 2%. Apr 17, 2021 04:58AM EDT. In a deal that's widely considered as a "reverse merger", Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. Thats 40% of the pro forma total for both companies. On Friday after the markets closed, Tilray filed a joint preliminary. Aphria said that the reverse-acquisition of Tilray was approved by 99.38% of the shares represented at its shareholders' meeting. 2023 InvestorPlace Media, LLC. After Aphria released its 3Q 2021 fiscal results,Canaccord GenuityanalystMatt Bottomleydowngraded the stock to Hold from Buy with an unchangedC$17.50price target (1.07% downside potential). Under the terms of the agreement, Aphria will become a wholly-owned subsidiary of Tilray. Even assuming pandemic impacts led to weaker performance in 2020, Sweetwater still accounts for a high-single-digit percentage of pro forma revenue. OrganiGram Holdings 2Q Revenue Misses Estimates; Shares Plunge 10%, Aphrias 3Q Sales and EPS Miss Estimates; Shares Plunge 14%, Shaw Communications 2Q EPS and Revenue Beat Estimates, Do Not Sell My Personal Information (CA Residents Only). Anheuser-Busch CEO on the Bud Light backlash: We never intended to be part of a discussion that divides people, Mark Zuckerbergs total 2022 pay rose because of the increased use of private aircraft, Elon Musk tells Tucker Carlson hell create TruthGPT chatbot to counter AIs liberal bias, Court tosses Berkeleys first-in-nation ban on natural gas in new construction. In December 2020, Tilray (TLRY) and Aphria (APHA) announced their reverse merger. I should mention, they're also quite active in international markets. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Last week, Aphria stockholders approved the deal overwhelmingly. It was a juicy merger arbitrage opportunity that has since come down. Aphria's CEO Irwin Simon is taking over that role with the reconstituted Tilray, and has also become the chairman of the new company's board of directors. All of the stocks that were pumped by WallStreetBets have fallen sharply from their peaks. Stephanie Bedard-Chateauneuf for Aphrias CEO Irwin D. Simon will lead the company. Against pro forma revenue of $693 million, what will be Tilray looks cheap by sector standards. Balsky is bullish on the business and expects progress from the government to legalize marijuana at the federal level. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Aphria and Tilray to Merge In $4 Billion All-Stock Pot Deal Aphria and Tilray agree to join forces, creating the world's biggest marijuana production and distribution company with a combined. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Whats the TLRY-APHA merger date and is there still an arbitrage opportunity available before the merger is complete? Relative to FY2021 (ending March) consensus estimates, Canopy Growth (NASDAQ:CGC) trades at about 20x EV/revenue, and Sundial Growers (NASDAQ:SNDL) an even higher multiple. (See Aphriastock analysis on TipRanks). Part of the cause of the sell-off is that APHA got some draft from the Reddit rallies, even if it didnt move as high as did Tilray. These symbols will be available throughout the site during your session. Net cannabis revenue plunged by nearly one-fourth quarter-over-quarter. Related News:good natured Products Revenue Increases 65% In FY2020The Green Organic Dutchman Gives Update On OperationsAphria Shareholders Approve Tilray Merger. Under the terms, Aphria shareholders receive 0.8381 of a Tilray share for each common share of Aphria. Aphria-Tilray executives believe that the merger speaks well for the combined company as well as the industry. TLRY was trading at almost twice what it should have based on the merger ratio. ca:apha 1125 N. Charles St, Baltimore, MD 21201. Aphria's shareholders have already voted and approved the merger on April 15. Marijuana stocks have been very volatile over the last few months. Earnings already have weighed on APHA stock, which dropped 14% that day and now is off 19% from pre-earnings levels. Say hello to what has become, at a stroke, a dramatically larger marijuana company: the new version of Tilray ( TLRY). Looking at the ratio, APHA's stock price was 0.734x of TLRYs stock price. The pro-form enterprise value of the company is listed at $3.9 billion. Tilray shares closed Friday down 1.78%, but have gained 122% in the year to date. This has led many As the mid-year mark is fast approaching, its not unusual for investors to assess the standing of their portfolio. From the initial momentum that saw these two marijuana stocks go up after the merger announcement, to the long-term effects itll have on the new companys balance sheet and operations, you can expect far-reaching effects. +0.33% As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.". Is the merger a done deal? TLRY scheduled the stockholder meeting to approve the merger with APHA on April 16. Nasdaq However, there has been a sell-off since then. Copyright Exactly what we want to see in a rational market that trades away merger arb: $APHA +12%$TLRY +2%. In using this website you accept the terms of service and are responsible for complying with all laws and regulations, including applicable local laws. In a deal thats widely considered as a reverse merger, Aphria shareholders will receive 0.8381 Tilray shares for each APHA stock that they currently own. Offers may be subject to change without notice. Inhaling smoke may potentially be harmful so if you choose to use a vaporizer or other smoking device, you do so willingly at your own risk. Tilray ( TLRY) - Get Free Report and Aphria ( APHA) - Get Free Report said Monday they had completed their merger, creating the world's largest cannabis company by revenue . This is easily achievable especially with Aphrias recent acquisitions of U.S. craft beer company Sweetwater Brewing. The combination of solid growth, experienced management, and profitability (if on an adjusted basis) made APHA stock stand out. On Monday, Tilray's shares closed 7.2% lower, against the 0.3% rise of the S&P 500 index. Market Realist is a registered trademark. Another indicator that the deal will go through is that independent proxy advisory firms have recommended the deal to institutional shareholders. There is also the idea of selling the news. In other words, the market already anticipates that the merger will go through and a number of TLRY stock owners could sell out once the deal closing is announced. Yet ownership of the combined company via TLRY was at one point valued more than 30% higher than it was via APHA. Marijuana stocks experienced a surge in price on Monday after Governor Andrew Cuomo confirmed that his state was very close to lega STONERS ROTATION 2023 | A VESSEL CREATIVE COMPANY. Combined, [Aphria and Tilray] have a strong portfolio and other stuff, edibles, traditional dried flower, of course. TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions. A cheaper price helps but it doesnt help enough yet. Covid-19 related lockdowns have presented unique challenges across Canadian and German markets. Tilray changed its bylaws in April to reduce its shareholder vote quorum to one-third of the voting power of the outstanding shares entitled to vote to approve the deal, instead of a majority of the voting power of the outstanding shares. Key details about the Aphria-Tilray merger. Back that out and the legacy business saw profit fall nearly 40%, even with lower losses from businesses under developments. TLRY closed Wednesday at $25.29. In terms of leadership for the combined company, Aphrias current CEO and Chairman, Irwin Simon will work in the same capacity. The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital giving it the ability to accelerate growth and deliver attractive returns for stockholders, the companies said. Once the merger is complete, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own. 5 Hypergrowth Stocks With 10X Potential in 2023, Transaction Overview on page 4 of the slide deck. Meanwhile, Tilrays current CEO and Chairman will be one of the new companys board of directors. Talking of marijuana stocks, they have started to look very overvalued at their peaks even if we discount all of the positives. Invest better with The Motley Fool. 2023 TheStreet, Inc. All rights reserved. Eventually, on the merger date, APHA stocks would get converted to TLRY stocks based on the merger ratio. However, the meeting of Tilray stockholders was postponed. Merger Details The deal, should it be approved, will go as follows. Meanwhile, the combined company would have a market capitalization of around $7 billion at the current APHA stock price. The stocks continued to rise in 2021 after the Senate runoff. Action Alerts PLUS is a registered trademark of TheStreet, Inc. Take Charge of Your Money During our April Sale! Type a symbol or company name. The combined U.S. operations will focus on Sweetwater and Manitoba Harvest, which makes branded hemp and CBD products. Tilray lost 271 million CAD for the year ending Dec. 2020 and Aphria has lost 361 million CAD in the nine month period ending Feb. 28. All Rights Reserved. When it does exist, it could become the world's biggest cannabis company eclipsing Canopy Growth by market cap.. Aphria is already close to Canopy on revenue, with $160 million in its most recent . Thanks to the crazy Reddit-driven rallies in February, the spread between TLRY and APHA ballooned. Mar. Regardless, the merger should save a lot of money. TIlray, however, is postponing its shareholder vote to April 30 (should have been tomorrow). Moreover, some might want to see if the proposed synergies actually do pan out, which could take some time. TipRanks->. The first quarter of 2021 has come to an end and it was certainly one to remember for the top cannabis stocks in the market. What's Next for Tilray Now That Its Merger With Aphria Is Complete? There's a lot of benefits to combining. The U.S. cannabis landscape continues to grow as more states open up for business. That's why we're seeing prices coming down. Aphria ( APHA ) and . Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Will More Tobacco Giants Invest in Marijuana Stocks? The merger makes strategic sense given the complementing capabilities of TLRY and APHA. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Then the company deactivated his account. The average analystprice target of C$22.05impliesupsidepotential of about24.6%to current levels. Tilray (NASDAQ:TLRY) shareholders will vote on the all-stock merger with Aphria (NASDAQ:APHA) on April 30. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Aphria shareholders will receive 0.8381 shares of TLRY stock for every one share of APHA stock they own. Although Tilray is down by around 50% year to date, Aphria is up by 72% this year. Simon said, "Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. 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