(ticker: ACB) stock has never had the steep valuation of their rival Canadian potters
(TLRY). It will change, after tomorrow's announcement that activist Nelson Peltz came to Aurora as "Strategic Advisor." The news sent Aurora shares up by 11% in premarket trading to 8.80.
background. Edmonton, Alberta-based Aurora has accumulated Buy rankings lately from analysts who note 20% market share of Canada's recreational pot sales and efficient production. Cowen s Vivien Azer launched coverage last week, with a price target of $ 10.50. Jefferie's analyst Owen Bennett noted that Aurora shares are trading at a lower number of sales and projected cash flow than Tilray or Canopy stocks.
What's New: Peltz will work with Aurora to "explore potential partnerships that would be the optimal strategic fit for successful entry into each of Auror's overall market segments" and advise on its global expansion. Previously, the investor has shaken consumer-packaged companies as
Procter & Gamble
(KHC) predecessor H.J. Heinz, and
(MDLZ) – everything that cannabis companies will follow as weeds become a common product like alcoholic beverages.
For his efforts, Peltz gets the opportunity to buy 20 million Aurora shares at a price of Canadian $ 10.34 (equivalent to USD 7.75) over a four-year plan – with accelerated profits if certain agreements close or the Aurora share reaches C $ 31.
Looking Ahead: While Aurora has done well to produce cannabis, it has delayed peers in nabbing deals with big-name partners in the food industry. It will change, as it does with some help from his friend.
Write to Bill Alpert at firstname.lastname@example.org