Green Growth Brands Inc. shares hit a record high Thursday after the cannabis company announced a partnership with shoe retailer DSW Inc., bringing the stock a bit closer to the valuation needed to proceed with its hostile bid for Aphria Inc.
The stock rose as much as 10 per cent to $5.89, or 19 per cent below the $7 valuation on which Green Growth based its $2.8 billion offer for Aphria. Green Growth said it will sell hemp-derived cannabidiol, or CBD, foot creams, muscle balms, body lotions and body washes at 96 DSW stores throughout the U.S.
Aphria, based in Leamington, Ontario, has been under attack from short sellers who accused it of paying inflated prices for assets held by insiders, and the offer from Green Growth raised further questions about connections between the two companies.
Hindenburg Research, one of the short sellers, also questioned Green Growth’s intention to complete a financing of $300 million at $7 a share to fund the takeover, well above its closing price of $4.98 on the day the planned offer was announced, calling it “highly irregular.”
Green Growth Chief Executive Officer Peter Horvath said in response that investors believe “it is not a question of if Green Growth reaches $7 a share, but when.” DSW and Green Growth are based in Columbus, Ohio.
Aphria reports results pre-market Friday with a conference call at 9 a.m. New York time. Aphria rose 1 per cent to $9.02 in Toronto, giving it a market value of $2.2 billion.
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