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Green Growth Brands Launches Aphria Bid: Dmitry Zaytsev on the Not so Hostile Takeover Deal
Analyst Dmitry Zaytsev discusses the recent official Aphria Inc (TSE:APHA) (NYSE:APHA) (FRA:10E) takeover bid tabled by Green Growth Brands Ltd (CNSX:GGB) (OTCMKTS:GGBXF). Zaytsev has concerns about a number of aspects of the GGB offer. Zaytsev takes issue with GGB’s financing history, especially its agreement to pay All JS Greenspace LLC, which is helping to finance the capital raise to acquire Aphria, a commitment fee of $7.5 million if the deal does not go through. Most troubling for Zaytsev is the lack of transparency about the existing relationships between the two companies. He reveals that an Aphria subsidiary, GA Opportunities, is one of the largest shareholders in GGB, holding a 10 percent stake. GA Opportunities has partnered with All JS Greenspace LLC, a Schottenstein family holding that is financing the takeover bid, to create Schottenstein Aphria LLC. In addition, All J sold a pharma shell into Schottenstein Aphria LLC, which then used an RTO to launch Green Growth Brands. Zaytsev concludes the proposed deal will result in an automatic dilution for Aphria shareholders.