Shares of Tilray Inc.
soared 30.8% in premarket trading and Aphria Inc.’s U.S.-listed stock
surged 9.9%, after the Canada-based cannabis companies announced a merger, which they say will create the largest global cannabis company, with a combined equity value of about $3.9 billion. After the deal closes, which the companies said was structured has a “reverse acquisition” of Tilray, Aphria shareholders will own 62% of outstanding Tilray shares. The announcement comes after reports surfaced late Tuesday that the companies were in advanced merger talks. Under terms of the merger deal, Aphria shareholders will receive 0.8381 Tilray shares for each Aphria share they own, while Tilray shareholders will see no adjustment to their holdings. The “reverse acquisition” of Tilray represents a 23% premium to Tilray’s stock closing price of $7.87 on Tuesday. Tilray’s stock has tumbled 54.1% year to date through Tuesday, while Aphria shares have rallied 55.6%, the ETFMG Alternative Harvest ETF
has lost 11.2% and the S&P 500
has gained 14.4%.