Aurora Cannabis names Trian's Nelson Peltz as adviser, shares rise

Lloyd Doyle
March 15, 2019

Aurora Cannabis' stock surged almost 14% Wednesday after the company said that Nelson Peltz, a billionaire activist investor and a founding partner of hedge-fund Trian Fund Management, would become a strategic investor and advisor at the company.

The Canadian pot company said Wednesday that Peltz will help it find partnerships and advise its global expansion strategy.

Peltz is the nonexecutive chairman of Wendy's and also serves on the boards of Procter & Gamble, Sysco, and Madison Square Garden. Peltz will join ACI as a strategic investor and advisor.

While Coke didn't confirm or deny that it had been in talks with Aurora, the company said it was "closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages".

The Aurora deal gives Peltz the option to buy almost 20 million shares of the company at $7.74 - which could make him the second-largest owner, behind Vanguard.

"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.

The world's largest cannabis firm, Canopy Growth Corporation (CGC), in August 2018 received a $3.8 billion investment from Constellation Brands, the company that owns Corona Beer. Aurora is a Canadian producer of marijuana that is listed in both Toronto and NY.

Including Wednesday's gains, Aurora's US -listed shares have surged more than 68 percent this year.

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

He said Peltz's firm Trian has been involved with a number of internationally leading CPG companies such as PepsiCo, Dr Pepper Snapple, Kraft Foods and Heinz. "We believe he could be instrumental in facilitating discussions with large CPG companies".

This equates to a almost 2 percent stake in the company, which would be vested every quarter over a four-year period, Aurora said.

That will be "subject to accelerated vesting based on the occurrence of certain specified events, which include the consummation of certain defined transactions and the closing price of Aurora's common shares being at least CA$31.02 and additionally CA$41.36 for a specified number of trading days".

Other reports by Iphone Fresh

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