The Creso Pharma Ltd (ASX: CPH) share price won't be going anywhere today and will remain suspended following the release of the cannabis company's takeover update.
What has happened?
In June of this year Canadian cannabis company PharmaCielo made an offer to acquire Creso Pharma in an all scrip deal that originally valued it at $122 million.
In August the independent expert's report from BDO Corporate Finance concluded that the share scheme was not fair but reasonable and was therefore in the best interest of Creso Pharma shareholders.
However, on September 16 BDO issued a letter to the company withdrawing its independent expert's report. That letter noted that, as per its requirements, BDO had been monitoring market circumstances that drive valuation assumptions, and consequential opinions.
It noted that the then prevailing market price of PharmaCielo shares on TSX-V had declined significantly below the valuation range outlined in the report, to the point where BDO no longer considered the schemes to be in the best interests of Creso Pharma's securityholders.
Since then, though, the PharmaCielo share price has pushed higher following a series of positive announcements pertaining to both businesses. This led to BDO issuing a new independent expert's report concluding that the schemes are in the best interest of Creso Pharma securityholders once again, in the absence of a superior offer.
What now?
This saga still has a few more hurdles to clear before it comes to an end.
The scheme booklet has been updated and has been resubmitted to ASIC for its continuing review. Subject to the satisfactory conclusion of ASIC's review, the company intends to proceed with its first court hearing on October 2.
Dr Miri Haperin Wernli, Creso Pharma CEO and co-founder said: "We are very pleased to have received the additional certainty provided by the positive opinion of the Independent Expert. The Creso Pharma board remains committed to the Schemes and Creso Pharma is excited to be progressing the Schemes towards completion which is now likely to occur in mid to late November 2019."
Elsewhere in the industry today, the Althea Group Holdings Ltd (ASX: AGH) share price has pushed 2% higher and the Cann Global Ltd (ASX: CGB) share price is down 3%.
