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Green Growth Brands Announces Intention to Launch Takeover Offer for Aphria Inc. Canadian Stock Exchange: GGB.CN



NOT TO DISTRIBUTE TO THE NEWSWIRE SERVICE OF THE UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES. THIS NEWS RELEASE DOES NOT PROVIDE OFFERS TO SELL OR OFFER COLLECTION TO BUY EVERY EFFECT IN THE UNITED STATES.

  • Offer worth C $ 11.00 per Aphria share
  • Significant and attractive premiums of 45.5% of the closing price of Aphria on December 24, 2018
  • C $ 300 million in simultaneous financing in Green Growth at C $ 7.00 per share
  • Create the only large-scale operator that bridges the US and Canadian markets; no other Canadian LP operates on a scale in both markets

COLUMBUS, Ohio, December 27, 2018 (GLOBE NEWSWIRE) – Xanthic Biopharma Inc. do business as Green Growth Brands Ltd. ("Green Growth") (CSE: GGB) announced today that it intends to submit an offer (the "Offer") to purchase all issued and outstanding common shares ("Aphria Shares") from Aphria Inc. ("Aphria" or "Company") (TSX: APHA and NYSE: APHA) which he hasn't had.

This offer will give 1.5714 common shares to the Aphria Shareholders of Green Growth shares ("Green Growth Shares") for each Aphria Share and represent a premium of 45.5% above the closing price of Aphria on the Toronto Stock Exchange ("TSX") on December 24, 2018 and 46.0% above the volume weighted average volume of Aphria on TSX for the last 10 trading days ending on December 24, 2018. This offer assesses Aphria around C $ 2.8 billion (US $ 2.1 billion ) based on a valuation of C $ 7.00 per share for Green Stock Growth.

"We believe our offer will create value for Aphria shareholders and Green Growth. We believe that the significant premiums we offer and the opportunity to participate in the growth of a stronger and combined company are so attractive that we take our offer directly to Aphria shareholders. Together, we can issue synergies between our team, assets and geography, form a joint company that will accelerate our collective growth strategy in Canada, the US and abroad, "said Peter Horvath, CEO of Green Growth.

Green Growth expects to complete brokered joint financing of C $ 300 million, with a price per share of C $ 7.00, both of which reflect trust in the value of consideration in the Offer and to fund the business growth of the combined entity. Green Growth hopes that certain existing shareholders will commit to terminate C $ 300 million in financing together with the implementation of a business combination agreement with Aphria or taking shares under the anticipated Offer.

Before announcing its intention to bring Offers directly to shareholders, Green Growth involved the Aphria council to try to negotiate friendly business combinations, including, among other things, a very short period of exclusivity to allow both parties to seriously consider the combination; provisions of a complete shop supporting Aphria; and management preservation and Aphria's commitment to represent the board in a joint company. Aphria shareholders must recognize that Green Growth offers it with a friendly business combination with support from the Aphria board, Green Growth will invest C $ 50 million in equity in Aphria per share value of C $ 11.00.

Why Green Growth and Combined Aphria Are Better for Shareholders

Combining Aphria with Green Growth is the fastest way to create significant value for shareholders from both companies. Combined entity:

Creating an incomparable North American player with Canadian and U.S. operations. Aphria has a large footprint in Canada and supply agreements with all Yukon provinces and regions and strong strategic partnerships in making wholesale supply agreements. Green Growth operates vertically integrated marijuana operations including cultivation, manufacturing and retail assets in Nevada, including recently being granted seven retail marijuana dispensary licenses. Together, pro forma companies will have a strong foundation, extensive retail relationships and infrastructure to capture significant future growth as the international market develops.

Increasing the Scale, Footprints and Creating U.S. Consolidators Leading. The joint company will become the largest US operator based on market capitalization and the only North American marijuana operator.

Combining Aphria Cultivation and Production Capacity with the Strength of Green Growth Retail. The combined company will marry low-cost Aphria cultivation and short-term production capacity with extensive Green Growth retail knowledge to capture market share while maintaining lean margins. Aphria's current cash cost per gram is C $ 1.30 and is expected to decrease to C $ 0.95 per gram with annual projected capacity of more than 250,000 kg at the beginning of 2019 (Aphria Q1 2019 Investor Presentation on October 11, 2018). The strong Green Growth management team has a proven track record in shipping at the retail level and has operated the best pharmacy in its class in Las Vegas.

Ready to Benefit from Changing Regulations Related to Marijuana in the Largest Marijuana Market in the World. Green Growth will soon launch a consumer-focused CBD product line, initially focusing on topical and balm, and is in a good position to benefit from US pro-marijuana regulations in the near to medium term.

Bringing together the Best Management Team in its Class: Pharmacy and Aphria Greenhouse Operational Experience and Retail Expertise Proven Green Growth. The Aphria team consists of veterans in the greenhouse industry and proven operators of major pharmaceutical companies. The CEO of Green Growth holds senior positions at a number of well-known retailers including Designer Shoe Warehouse Inc. and L Brands Inc. (Victoria's Secret). In addition, the largest shareholder of Green Growth, the Schottenstein family, has deep relationships in the retail sector.

Benefits for Aphria Shareholders

While Aphria shareholders may be discouraged by recent events and after seeing their investments affected significantly, they must be aware of the immediate benefits of the Offer and tender reasons:

  • Premium is significant and direct 45.5% of market price.
  • Meaningful ownership positions in joint entities that are ready for further growth.
  • Potential for the impact of further decline in share prices if the Offer is not accepted

Green Growth believes that it already has support for the Offer from Aphria shareholders holding around 10% of Aphria's outstanding shares. Green Growth has also gained a significant foothold in Aphria.

It is hoped that after the Green Growth Offer will continue to be listed on the Canadian Stock Exchange under the GGB symbol.

Question? need more help? Aphria shareholders must contact Kingsdale Advisors, the information agent and depositor for the Offer, at 1-866-851-3214 (North American Toll Free Number) or + 1-416-867-2272 (Outside North America) or by email at contactus@kingsdaleadvisors.com.

Intention to make an offer

Full details of this Offer are expected to be contained in an official Offer and an offer circular that is expected to be sent to Afria shareholders, a copy that is expected to be available at www.sedar.com under the Aphria profile. Green Growth expects to formally commence the Offer and send offers and offer circular letters to Afria shareholders over the coming weeks.

The reader is warned that Green Growth can determine not to bid if (i) the Aphria implements or tries to apply defensive tactics with respect to Bidding, (ii) Green Growth finds or sources of funding in question reveal or identify information that suggests that business, business, prospects, or Aphrian assets have been impaired or revealed or identified other undisclosed negative material information about Aphria or (iii) Aphria decided to engage with Green Growth to negotiate the terms of a combination transaction and Aphria and Green Growth determine to make transactions using structures aside from takeover offers such as the arrangement plan. Therefore, there is no guarantee that an Offer will be made or that the final provisions of the Offer will be as stipulated in this news release. In addition, the planned refinement of brokered intermediary financing of C $ 300 million, with a price per share of C $ 7.00, and a contemplated backstop commitment in that case, are subject to various possibilities and conditions, including satisfactory settlement of rights. which is due. perseverance for Aphria and Green Growth, agreement on definitive agreed upon documentation and other customary business and provisions. There has been no binding commitment in any form in this matter, and readers should not assume such commitments will be made except and until reflected in binding instruments agreed upon by the intended source of funds, which cannot and should not be assumed or guaranteed.

The offer will be made in accordance with National Instrument 62-104 – Takeover and Issuer Offer and will be subject to a number of customary conditions, including: (i) those deposited under the Bid, and not withdrawn, at least 66 2/3% of Aphria's Shares outstanding (calculated based on full dilution), excluding Aphria Shares owned by Green Growth; (ii) receipt of all government, regulatory, exchange and third party agreements that are considered necessary or desirable by Green Growth in connection with the Offer; (iii) there is no legal prohibition on Green Growth that makes an Offer or takes and pays for Afria Shares; (iv) Aphria does not adopt or implement a shareholder rights plan, release any assets, incur material debts, implement any changes in its capital structure or implement or try to implement defensive tactics; (v) no adverse material changes occur in Afria's business, business, prospects or assets; (v) Green Growth does not realize that Afria has made false statements about material facts or omitted material facts that must be made to securities regulating authorities; (vi) approval by Growth Green shareholders in accordance with the Canadian Stock Exchange policy; and (vii) the minimum statutory provision that 50% of Afria Shares have been tendered on the Offer, excluding Afria Shares owned by or where control is carried out by Green Growth (which cannot be ignored). If the Offer takes place, Green Growth expects to call during the first quarter of 2019 shareholders meeting to consider a resolution to approve the issuance of Green Growth Shares in connection with the Offer. Green Growth expects that the Offer, when it is made, will remain open for an acceptance period of at least 105 days from the date of the circular takeover offer. It is the authority of the Afria Board of Directors to significantly shorten this minimum bidding period, which allows shareholders to receive benefits from Green Growth offers in just 35 days. Company shareholders are encouraged to contact Aphria and to urge management and the Board to allow takeover of Green Growth to continue within the minimum time frame permitted.

Advisor

Green Growth Brands has maintained Canaccord Genuity as its financial advisor, Norton Rose Fulbright Canada LLP as its legal advisor, and Kingsdale Advisors as a strategic shareholder and communications and storage advisor.

About Green Growth Brands
Green Growth brands hope to dominate the market for cannabis and CBD with an emotion-driven brand portfolio that many people like. Led by renowned retailer Peter Horvath, the GGB team is full of retail rebels with decades of experience in building successful brands. Join the movement at GreenGrowthBrands.com.

Media Contact:
Ian Robertson
Executive Vice President, Communication Strategy
Kingsdale Advisor
Direct: 416-867-2333
Cell: 647-621-2646
Email: irobertson@kingsdaleadvisors.com

Precautionary Statements in Forward-Looking Information [NTD: Subject to ongoing review]

This press release contains certain statements and information which constitute "forward-looking information" in the sense of applicable securities laws. If possible, forward-looking information can be identified by the phrase "look for", "expect", "believe", "estimate", "will", "plan", "maybe", "believe", "anticipate", "target" and similar (or negative expressions of such expressions). Forward-looking statements are not historical facts, but reflect current Green Growth expectations regarding future results or events and are based on information currently available to him. The forward-looking events and circumstances discussed in this release include, but are not limited to, (i) Bidding, Offer conditions and the anticipated start time of Bidding, (ii) benefits from Bidding for both Green Growth and the Company, including wealth creation and value and the synergies that can be created by Bidding, (iii) financing C $ 300, time and requirements, (iv) expectations regarding ownership, management, operations, and measures of Green Growth after completion of Bidding, (v) future Green Growth strategies and plans , including following the Bid, and (vi) the marijuana industry and regulatory environment. Material factors and certain assumptions are applied in providing this forward-looking information. All material assumptions used in making forward-looking statements are based on Green Growth's knowledge of its business and Aphria's business, and, in some cases, information provided by third parties, including public disclosures made by the Company. Certain material factors or assumptions include, but are not limited to, (i) current business conditions and expectations of future business conditions and trends affecting Green Growth and Aphria, including the US and Canadian economies, the cannabis industry in Canada, the US and elsewhere and capital markets, and (ii) that there are no material changes in the business, business, capital, prospects or assets of the Company, except as disclosed publicly by the Company before the date of this agreement. All forward-looking statements in this press release qualify by this warning statement. Green Growth believes that the expectations reflected in forward-looking statements are based on reasonable assumptions; However, Green Growth cannot guarantee that actual or developmental results will be realized on a certain date or at all. This forward-looking statement is subject to a number of risks and uncertainties that can cause actual results or events to differ materially from current expectations. In addition to the risks noted elsewhere in this news release, material risks include, but are not limited to, (i) the risk that the Offer will not start or that the conditions of the Offer will not be fulfilled, or fulfilled in a timely manner. basis, or that transactions will not be resolved for other reasons, (ii) changes in general economic conditions in Canada, the United States and elsewhere, (iii) changes in operating conditions (including changes in the regulatory environment) that affect industrial marijuana, ( iv) currency and interest rate fluctuations, availability of materials and personnel, and (v) Green Growth capabilities to successfully integrate Green and Aphria Growth operations after completion of the Offer, including the ability to retain key Aphria personnel and renegotiate certain contracts to obtain economies of scale or other synergy. The reader, therefore, must not place undue dependence on such forward-looking information. Furthermore, forward-looking information speaks only to the date on which the statement was made. Green Growth has no obligation to publicly update such statements or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. This forward-looking statement was made on the date of this press release. Precautionary Statements in Respecting Proposed Offers

GREEN GROWTH HAS NOT TOLD THE OFFER OFFERED ABOVE. AFTER THE OFFERING COMMISSION, GREEN GROWTH WILL SEND THESE CIRCULARS TO SHAREHOLDERS IN APPROVAL WITH APPLICABLE LAW, PUNISHMENT AND WILL APPLY, OFFER MORE BID CIRCULAR WITH SECURITY, OFFICE IN OFFICE OFFICE IN OFFICE IN OFFICE IN OFFICE BECAUSE BECAUSE BECAUSE BECAUSE BECAUSE BECAUSE OFFICE IN OFFICE OFFICE IN OFFICE BECAUSE IT IS AWAY IN THE DISTRICT IN THE DISTRICT IN MANY DISTRICT. . BID SIRKULER TIRE-OVER WILL CONTAIN IMPORTANT INFORMATION ABOUT OFFERING AND MUST BE READ IN ITS COMMUNITY BY APHRIA SHAREHOLDERS. AFTER THE OFFER BEGINS, APHRIA SHAREHOLDERS WILL BE ABLE TO TAKE, WITHOUT FEES, COPY USING APPLICABLE DOCUMENTS AND VARIOUS DOCUMENTS UNDER THE PROFILE IN THE SYSTEM FOR DOCUMENTS OF DCOM SYSTEMS. THIS ANNOUNCEMENT IS ONLY FOR INFORMATION PURPOSES ONLY AND DOES NOT CHANGE OR FORM OF PARTS OF OFFERING TO BUY OR INVITATION TO SELL, ACHIEVE OTHER INFORMATION, OR SUBSCRIBE FOR ANY SECURITY. OFFER WILL ONLY BE MADE BASED FOR FORMAL OFFERS AND TAKE SIRCULAR BID. OFFER WILL NOT BE MADE, OR WILL SAVE THE SECURITIES WILL BE ACCEPTED FROM PEOPLE IN ANY OF THE JURISDICTIONS IN THE MAKING OR ADMISSION THAT WILL NOT BE COMPLETED WITH SUCH LEGAL REGULATIONS. BUT, GREEN GROWTH MAY BE, IN ITS OWN THING, TAKING SUCH ACTIONS AS IT NEEDS TO EXTEND THE OFFER IN SUCH JURISDICTION.

United States of America:

Securities cannot be offered or sold in the United States without registration or exemption from registration under the US Securities Act 1933, as amended. Securities will not be offered, and securities securities will not be received from someone, in the United States of America where any securities offerings, or their receipts, will not be in accordance with the laws of that jurisdiction.

Neither the SEC nor any state securities commission in the United States do (a) approve or disagree with the Offer, (b) provide Offer benefits or fairness, or (c) provide the adequacy or accuracy of disclosures in this document. Contradictory representations are criminal offenses in the United States.


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