SNDL Inc. SNDL on Monday announced the completion of its acquisition of Nova Cannabis Inc. NVACF NOVC, securing full ownership by purchasing the remaining 34.8% of the shares it did not already own. The transaction was approved by more than two-thirds of Nova shareholders and a majority of disinterested shareholders, increasing the efficiency of SNDL's cannabis retail operations.
Nova shareholders profit from deal
Under the deal, Nova shareholders received $1.75 in cash per share. This is an addition of 41.2% to the 20-day volume-weighted average trading price as of August 12, 2024.
Alternatively, you may elect to receive 0.58 shares of SNDL common stock for each Nova share, subject to pro rata and up to 50% of the total consideration payable in SNDL shares. The majority chose cash, with only a few choosing to receive SNDL shares.
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CEO emphasizes cost reduction in transactions
“The acquisition of Nova's remaining minority interest is an important investment that will streamline SNDL's cannabis retail operations and generate significant savings by reducing public company expenses,” said Zachary George, CEO of SNDL. It's a milestone,” he said. He noted that the transaction was structured to encourage shareholders to opt for cash, emphasizing efficient capital deployment without significant equity dilution.
Nova stock delisting decision, SNDL appoints new director
Following the acquisition, Nova shares will be delisted from the Toronto Stock Exchange and over-the-counter markets. Additionally, Nova will cease to be a reporting issuer in Canada, and SNDL will subsequently merge with Nova under Alberta's Business Corporations Act.
Related article: Nova Cannabis shareholders approve SNDL acquisition: What this means for investors
In connection with this transaction, SNDL will appoint to its Board of Directors Mr. J. Carlo Canel, an experienced practitioner of “special situations” since 1992. This move is in line with SNDL's strategic expansion and strengthening of governance.
SNDL strengthens position and prepares for growth
For investors, SNDL's acquisition of Nova strengthens its position in the Canadian cannabis retail market, optimizing operations and reducing costs. By reducing public company expenses and strengthening its cash position, SNDL is poised for growth, becoming a more efficient player in an increasingly competitive industry and potentially increasing shareholder value over the long term.
Nova shareholders of record are encouraged to promptly submit documentation for consideration under this arrangement. SNDL's legal advice was provided by McCarthy Tétrault LLP, and Nova was advised by Eight Capital and Bennett Jones LLP.
SNDL Price Action
SNDL stock was trading down -1.24% at $2.00 per share as of press time at approximately 11:30 a.m. ET on Monday.
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