Organigram (NASDAQ: OGI) agrees to buy Aurora at a 93% premium, topping Curaleaf

What happened

Organigram Global Inc. (NASDAQ: OGI) agreed to buy Aurora Cannabis Inc. for C$7.80 a share. That values Aurora's fully diluted equity at about C$561 million.

The price is a 93% premium to Aurora's TSX close on Aug. 10, the last full trading day before Curaleaf Holdings, Inc. announced a hostile takeover bid.

It is also 21% above the current value of that bid as amended Oct. 6. The comparison uses Curaleaf's 20-day volume-weighted average share price on Nov. 2.

Aurora's board unanimously rejected the Curaleaf bid. It approved the Organigram deal and recommends that shareholders vote for it. Organigram's board approved it unanimously too. Directors and senior officers of both companies have signed voting support agreements.

Key numbers

Metric	Latest	Change	Source
Offer per Aurora share	C$7.80		SEC 6-K, Exhibit 99.1 news release
Premium to Aurora's Aug. 10 unaffected price	93%		SEC 6-K, Exhibit 99.1 news release
Premium to Curaleaf bid value (Nov. 2)	21%		SEC 6-K, Exhibit 99.1 news release
Aurora fully diluted equity value	approximately C$561 million		SEC 6-K, Exhibit 99.1 news release
BAT private placement gross proceeds	C$187.5 million		SEC 6-K, Exhibit 99.1 news release
ATB credit facilities commitment	up to $210 million		SEC 6-K, Exhibit 99.1 news release

Read more: Organigram Global (OGI) company research

What Aurora shareholders can choose

For each Aurora share, holders can elect all cash, 5.8626 Organigram shares, or C$3.75 in cash plus 3.0431 Organigram shares. The share options use Organigram's 20-day volume-weighted average price on the TSX on Nov. 2.

All-cash and all-share elections are subject to proration. In total the deal will use no more than C$253.64 million in cash and no more than 205.83 million Organigram shares.

Aurora holders are expected to own about 35% of the combined company on a fully diluted economic basis and 42% of the votes. Eligible Canadian-resident holders who take shares are expected to get a tax-deferred rollover, subject to applicable law.

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How the cash is financed

The filing says the cash portion is expected to come from cash on hand, a concurrent BAT investment and a larger Organigram credit facility.

BAT, Organigram's strategic shareholder, will buy 141.0 million new Organigram shares at C$1.33 each, for gross proceeds of C$187.5 million. The money pays the cash portion and certain related expenses. For any amount that would lift its stake above 30.0% of Organigram shares, BAT gets non-voting convertible preferred shares.

ATB Financial has fully committed to and underwritten senior secured facilities of up to $210 million. They amend and restate Organigram's existing $70 million credit agreement with ATB and mature three years after closing. Interest runs at ATB's benchmark rates plus a margin tied to net funded debt to EBITDA.

OptimistFi's tally shows the commitment is a $135 million term facility, a $65 million revolver and a $10 million operating facility. Only part is aimed at Aurora. That part is a $115 million second term tranche available at closing and up to $35 million of the revolver, or up to $150 million together. The $20 million first tranche was drawn to buy Sanity Group GmbH and remains outstanding.

Why it matters

OptimistFi has argued that Organigram works only if product mix, cost discipline and working-capital control turn a mature, price-competitive Canadian market into sustained cash generation.

This deal adds scale and reach. The combined company would own and operate five EU-GMP certified production and distribution facilities, so the case is now mixed.

Organigram cites more than C$50 million in identified synergies. They come from cross-selling, procurement scale, consolidated distribution, public company expenses and routing international demand to the lowest-cost production asset. That speaks to cost discipline. But the filing lists failure to realize the synergies through integration issues among its risks.

The structure also changes what holders carry. Organigram will issue shares to Aurora holders and to BAT. The credit facilities carry covenants, including a maximum net funded debt to EBITDA ratio and a fixed charge coverage ratio.

BAT's influence stays central. It can cast 30% of the votes on Organigram shares and has signed an irrevocable agreement to vote for the deal and against competing proposals. Under an investor rights agreement dated April 15, it can nominate up to 30% of Organigram's board.

What's next

Organigram and Aurora expect to mail a joint information circular in due course and to hold special shareholder meetings in December 2026. Aurora needs at least two-thirds of the votes cast, plus a simple majority excluding certain holders under MI 61-101. Organigram needs a simple majority of votes cast, excluding BAT, to approve the share issuance.

Court approval from the Supreme Court of British Columbia and regulatory approvals must follow. The filing lists German foreign direct investment clearance and TSX approval among the conditions. If they come through, the companies expect to close in January 2027. A failed vote at either meeting would end the path to that closing.

Aurora also intends to file a second notice of change to its directors circular confirming its board's recommendation to reject the Curaleaf bid.

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