Aurora Cannabis Rejects Curaleaf's $5 Hostile Bid, Courts Rivals

A second rejection, and this time an open door

Aurora Cannabis has said no to Curaleaf Holdings a second time. Aurora is doing more than defending itself now: it is openly seeking other buyers. On October 14, the Canadian producer's board unanimously advised shareholders to reject Curaleaf's revised hostile offer, following a recommendation from a special committee of independent directors.45 The board also disclosed that its financial advisor has contacted several potential bidders. Aurora has signed confidentiality and standstill agreements with multiple parties, who have been reviewing company information and holding what it called numerous discussions.413

Aurora did not name the interested parties. It also did not say whether any formal competing proposal exists, and it cautioned that the process may not produce a deal.1314 Even so, the change matters. Aurora had defended its independence since August. Now it is running what amounts to an auction, and Curaleaf is the one bidder that has made a public offer but has not been given full access. CEO Miguel Martin said the special committee is "carefully evaluating strategic alternatives" that could deliver more value. Those options include a sale to one or more third parties or staying independent.6

How the bid got here

The fight began before it became public. According to Aurora's directors' circular, Martin and Curaleaf chief executive Boris Jordan first met virtually on June 22. Curaleaf then sent an unpriced letter asking for 30 days of exclusivity, which Aurora declined.17 A non-binding proposal of about US$4 a share followed on July 7, with a five-business-day deadline. Aurora's board rejected it on July 10.17 Curaleaf announced its intention publicly on August 11 and formally launched the bid on August 18.17 Coverage valued the opening offer at about $272 million.1 Business of Cannabis described it as the sector's first hostile M&A attempt since 2019.17

Aurora's board rejected the first offer unanimously at the start of September.17 Curaleaf responded on October 5 by raising its offer 25%, to an implied US$5 per Aurora share. Each share would receive 0.4013 Curaleaf subordinate voting shares plus US$1 in cash, up from 0.3463 shares and US$0.75.2 Curaleaf also lifted the maximum consideration per share from US$5 to US$6 and extended the expiry to December 4.2 It said the new price is an 86% premium to Aurora's unaffected 30-day volume-weighted average price of US$2.75.2

The billion-dollar arguments on both sides

Curaleaf's pitch rests on scale. It says the combined company would operate in 17 countries with more than US$1.5 billion in trailing revenue, nearly US$350 million in adjusted EBITDA, at least US$40 million in annual cost savings, and a pro forma market value above US$3 billion.210 Curaleaf has described itself as the world's largest cannabis company, with a market capitalization of US$2.6 billion.6

Aurora's defence also rests on a billion-dollar figure: Curaleaf's debt. Coverage of the latest rejection puts Curaleaf's debt at nearly $1 billion. Apart from lease liabilities, Aurora has none.1 In September, Martin put Curaleaf's debt at more than $1 billion.10 The exact number varies between reports, but the contrast does not. Aurora presents itself as the stronger balance sheet being asked to merge into a more leveraged one.

Aurora's main structural objection is that much of the cash in the offer would effectively come from Aurora itself. In its view, that lets Curaleaf take control without paying a real premium.37 The board also argues that most of the increase is paid in Curaleaf stock at an inflated value, which leaves Aurora holders fully exposed to any fall in that stock. It adds that Curaleaf has not backed up its synergy estimates, and that any synergies would mostly benefit Curaleaf's existing shareholders.4 Outside commentary has made similar points. In a September column, MBO Ventures' Darren Gleeman noted that Aurora held more cash and short-term investments than the roughly $51 million in cash Curaleaf originally offered. He also argued that the price cap limited shareholders' upside while leaving their downside open.2

The stock-price problem Curaleaf can't spin

The weakest part of Curaleaf's position is the share price on which the offer depends. The US$5 figure was calculated from Curaleaf's closing price of C$14.21 on October 2.10 Curaleaf's OTCQX shares then fell to about $8.40 by October 15, down from a September 23 peak of $11.90. Aurora traded around $4.10 on Nasdaq the same day.1 A simple calculation shows the effect. At $8.40, 0.4013 of a Curaleaf share is worth roughly $3.37. With the $1 in cash, the package comes to about $4.37, well below the advertised US$5. This bears out Aurora's warning that its shareholders would carry Curaleaf's price risk.4 It also explains why Aurora's own shares trade below the headline offer: the market is pricing a lower effective deal, not just uncertainty about whether it closes.

Aurora's valuation case goes further. Its circular argued, against the original bid, that recent Canadian cannabis deals imply about US$7.03 per share. It also cited TD Cowen analyst Derek Lessard, who said US$4 to US$5 undervalues the business and that Curaleaf's "premium excluding cash" framing overstates the real premium.17 Those numbers come from Aurora's own advocacy, so readers should treat them that way. Still, the gap between the advertised price and the market-implied value of the offer is hard to dismiss.

Governance, not just price

The control question has received less attention than price but may matter as much. Jordan holds an 18% economic stake in Curaleaf but controls 69% of the votes through multiple-voting shares. In June, Curaleaf shareholders removed a provision that would have converted those shares to ordinary voting shares after a US exchange listing.17 Aurora estimates its holders would own about 7.7% of the combined equity but only 3.2% of the votes.17 Aurora has also raised procedural objections. These include the bid's original expiry date, an allegedly missing French-language notice under Quebec law, and the lack of a tax-deferral election for Canadian holders.17 Both companies have also brought disputes to the Alberta Securities Commission. Curaleaf asked the regulator to block Aurora's at-the-market share issuance during the bid.10 Aurora filed its own application over what it called deficiencies in Curaleaf's disclosure.3

Why Europe is the real prize

Coverage agrees on why Curaleaf wants Aurora: its European supply chain. Aurora operates four EU-GMP-certified cultivation facilities totalling 353,400 square feet. Curaleaf owns one small Portuguese site with no GMP cultivation capacity.17 Aurora's European medical revenue rose from C$41.0 million in fiscal 2024 to C$131.8 million in fiscal 2026.17 Curaleaf's own managers told analysts in August that only about 20% of its international supply comes from its own facilities, and they called supply one of the business's biggest problems.17 Aurora reinforced the point in early October by completing a major expansion of its European EU-GMP facility, which it said would more than double expected annual flower output.3 The timing during a takeover fight looks deliberate.

The Organigram wildcard and the war of words

The most specific competing name is Organigram. Cultivated News reported that the Canadian producer, part-owned by British American Tobacco, has discussed a merger with Aurora. Neither company has confirmed it.16 Curaleaf reacted angrily. It said it was "outraged" that a company with a market value of about $200 million appeared to be welcomed into the process while Curaleaf was refused standard due diligence.6 Jordan called Aurora's response "grossly inadequate and negligent" and asked it to "make it make sense."1 Things have also turned personal. In September, Jordan suggested to Business Insider that Martin was protecting his own job.17

The likely outcome

By calling the offer inadequate in public, the board has backed itself into a corner. It now needs to find a better offer, or credibly commit to a standalone plan, before December 4.3 Curaleaf has two problems. One is a falling share price that keeps lowering the real value of what it is offering. The other is that it has never been let inside the data room. If Curaleaf wants to win, it will probably need to add cash rather than stock, which is what Gleeman suggested in September.2 Aurora says it will issue a new recommendation once the alternatives review is complete, and it is urging shareholders not to tender until then.13

The most likely outcome is that Curaleaf's current offer does not succeed as it stands. Either a cash-heavier bid or a competing deal will decide this contest, and the headline 86% premium will not. Whatever happens, the fight has made Aurora's European assets the clearest measure of value in cross-border cannabis M&A.