The companies behind the $3.4 billion as-soon-as-marijuana-is-legal merger, Acreage Holdings and Canopy Growth, have launched a charm offensive intended to get disgruntled shareholders to approve the deal.
What's happening: Since being announced in April, the deal has been touted as a coup for Canopy and a cop-out for Acreage by unhappy investors.
- Activist hedge fund Marcato Capital Management said in a public letter on May 6 it would vote its nearly 3% of Acreage stock against the "value destructive" deal, and urged other shareholders to do the same, Barron's reported.
- The market is clearly worried about the possibility that the merger falls apart — Acreage shares have fallen by more than 15% since the deal was announced, while Canopy's stock, which rose 15% in the days following news of the deal, has fallen below its share price before the deal's announcement.
On the other hand: Canopy agreed to pay $2.55 in cash and 0.5818 of Canopy shares for each Acreage share. The growing divide between the 2 companies' share prices is making that deal look sweeter.
Yes, but: Acreage CEO Kevin Murphy has downplayed the discontent, saying in an interview Friday that he feels "very, very good about where we are and where we're going,” and expects 100% approval. The deal requires 66% of shareholders approve to be finalized.