- Pet pharmaceutical company CannPal Animal Therapeutics (CP1) is set to be acquired by fellow ASX-listed medicinal cannabis company, AusCann (AC8)
- The offer values each CannPal shares at 18.4 cents — a 54 per cent premium to its one-week volume-weighted average price
- In total, the scheme values CannPal at roughly $17.5 million
- Each CannPal director plans to vote in favour of the scheme and recommends that all shareholders do the same, claiming its a strategic move
- The integration of the businesses will lead to more resources, staff and the ability to commercialise human and animal health products
- CannPal’s shares have been trading flat at 12.5 cents since early morning trade and AusCann last traded steady at 14 cents
CannPal Animal Therapeutics (CP1) is set to be acquired by fellow ASX-lister, AusCann (AC8) through a scheme implementation deed.
AusCann is a medicinal cannabis company that makes standardised, controlled dose products, provides educational support to healthcare professionals and generates accessible clinical evidence.
CannPal shareholders, who will first need to give approval to the transaction, will be offered 1.3 new fully paid ordinary shares in AusCann for every share in CannPal. This values each CannPal share at 18.4 cents per share and CannPal at roughly $17.5 million on a fully diluted basis.
This offer symbolises compelling value to CannPal’s shareholders, as it represents a 47.2 per cent premium to CannPal’s last closing price of 12.5 cents and a 54 per cent premium to its one-week volume-weighted average price of 11.95 cents.
Each director of CannPal plans to vote in favour of the scheme and recommends that all shareholders vote in favour as well.
Importantly, CannPal’s largest and founding shareholder, Merchant Opportunities Fund, which holds 19.88 per cent of CannPal, intends to vote in favour of the scheme.
CannPal believes that combining with AusCann will lead to a stronger leadership team, shared research and knowledge across human and animal health, strong financial position and the ability to generate long-term sustainable growth in the U.S., Australia, Middle East and Africa (MEA), and Germany markets.
“There is a great logic to combining Cannpal Animal Therapeutics with AusCann Group with the new business having enhanced capability to exercise the potential for new and stronger commercial pathways,” CannPal Chairman Geoff Starr said.
Specifically, the integration is expected to bring an expanded product portfolio comprising two products in the market, two that are expected to be launched within 12 months, and a medium-term product pipeline across human and animal health.
It will also result in being a larger ASX-listed company with enhanced liquidity, better placed to attract strategic and institutional investors, pursue growth opportunities and increase shareholder value.
“The complementary nature of developing new health solutions for both human and animal and creating a much larger addressable market makes this combination a gamechanger for both companies,” AusCann Chairman Max Johnston concluded.
CannPal’s shares have been trading flat at 12.5 cents since early morning trade and AusCann last traded steady at an even 14 cents.