Billionaire Peltz joins Aurora Cannabis to advise on partnerships, expansion

Cornelia Mascio
Marzo 14, 2019

"Canadian licensed producers, and Aurora in particular, are well positioned to lead in the development of the worldwide cannabis industry", Peltz said in a statement.

Canadian pot manufacturer Aurora Cannabis on Wednesday tapped venerated activist investor Nelson Peltz to serve as a new strategic adviser to its business.

"Peltz brings a network of relationships with large potential strategic companies that (Aurora) could partner with across medical and consumer applications", she said.

Shares of the company jumped 10 percent after it offered Peltz the role and an option to buy almost 20 million shares at C$10.34 a share, a small discount on the stock's close of C$10.64 on Tuesday.

Peltz is CEO and founding partner of Trian Fund Management LP, a multi-billion dollar investment management firm. "I also believe that Canadian licensed producers, and Aurora in particular, are well positioned to lead in the development of the global cannabis industry as regulations evolve, with a strong, globally replicable operating model".

"I believe Aurora has a solid execution track record, is strongly differentiated from its peers, has achieved integration throughout the value chain and is poised to go to the next level across a range of industry verticals", Peltz said in the release. He was previously a director at the food companies H.J. Heinz and Mondelez International and was also chairman and CEO of Triarc Companies, which owned Arby's and Snapple, as well as other consumer and industrial businesses. "We believe he could be instrumental in facilitating discussions with large CPG companies".

Jeffries analyst Owen Bennett said in a research note that Peltz's involvement with Aurora could help bring financial discipline to the company as it manages its future growth.

The deal does not involve Peltz joining Aurora's board.

Peltz immediately increases the likelihood of strategic partnerships, according to analysts.

"In addition, we think (Aurora) will be more patient in partnership selection than its peers, particularly regarding equity investment". The options will vest on a quarterly basis over four years, or faster if certain conditions are met, including "the consummation of certain defined transactions" and the share price hitting $41.36 for a specified number of trading days.

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