Tilray Brands stock rises as Curaleaf plots hostile takeover for Aurora

Tilray Brands stock rose by nearly 4% as investors rotated to companies in the cannabis industry after a report said that Curaleaf was planning a hostile bid for Aurora Cannabis. TLRY rose to an intraday high of 4.70, up by 25% from its lowest level this year.

According to the WSJ, Curaleaf, which is valued at $2.2 billion, plans to launch a hostile bid for Aurora, a Canadian cannabis company, after its board refused to negotiate. Curaleaf stock jumped by 2.35%, while Aurora rose by 20% to $3.45, valuing it at $226 million. Aurora plans to buy it in a $272 million deal.

Other cannabis companies jumped, with the AdvisorShares Pure US Cannabis ETF (MSOS) rose by over 2%. In a statement, the Chief Executive of Curaleaf said:

“We will now take our proposal directly to Aurora shareholders because the premium is significant, the strategic rationale is compelling, and further delay is unjustified.”

Tilray Brands, valued at over $624 million, jumped after the M&A report sparked excitement across the industry. Some investors believe the company could also become a takeover target if the sector enters a consolidation phase.

The M&A news came at a time when the cannabis industry is waiting for a major deadline in the reclassification process in the US. On August 17, participants in the DEA rescheduling hearing will submit their post-hearing briefs to the administrative law judge (ALJ) by this date. 

After this, the ALJ will submit a report with recommendations, a process that may take weeks or months, with participants given 20 days to file formal objections.

Tilray Brands, which was once one of the biggest cannabis companies, has gone through some major changes. It has expanded its business to other countries like Germany, the Netherlands, and in Latin America. This division grew by 36% in the second quarter of the year.

The company has also expanded aggressively in the beverage industry, making major acquisitions, including companies like BrewDog and brands from companies like Molson Coors and AB InBev. 

Its most recent results showed that Tilray’s revenue rose by 11% in the last financial year to $915 million. Its cannabis, beverage, distribution, and wellness revenues rose to $268 million, $254 million, $327 million, and $65 million, respectively.