UPDATE: PharmaCielo’s Deal for Creso Pharma Gets Scrapped

A deal that would have seen Creso Pharma taken over by PharmaCielo has now been cancelled after an independent review called the terms of the acquisition into question.

An Australian cannabis company and a Colombia-based producer have elected to scrap their acquisition deal after an independent business review called the agreement into question.

PharmaCielo (TSXV:PCLO) confirmed on Tuesday (November 5) that the deal has been cancelled because the board of directors for Creso Pharma (ASX:CPH) cannot support the original agreement,

Creso Pharma's decision comes after a BDO Corporate Finance review indicated the transaction was “neither fair nor reasonable and is not in the best interests of shareholders of Creso Pharma."

David Attard, CEO of PharmaCielo, said the company is disappointed about the way things ended between the two firms, but still managed to find a positive message.

“(W)e have appreciated the interactions between our teams over the past several months and wish them much success in their future endeavours," he said.

The original agreement did not include a break fee for any party, PharmaCielo indicated. The only remaining item is an AU$3.8 million secured bridge loan paid to Creso Pharma carrying a 15 percent interest rate per year. This payment, according to the Colombian firm, matures at the end of November.

The purchase deal first started falling through, officially, last Friday (November 1), when PharmaCielo confirmed it needed to make sure the BDO report did not affect the thinking of Creso Pharma.

Both companies had their shares halted after the first signs of a slowdown in the deal. As of the time of this writing, both companies remained halted from trading.

Back in October, Creso Pharma said that its board of directors unanimously recommended the approval of the deal by shareholders of the company.

share price chart creso pharma

PharmaCielo previously indicated it was unwilling to increase its offer.

The original agreement laid out a plan for PharmaCielo to acquire all of the issued and outstanding shares and listed options of Creso Pharma by way of a deal estimated at approximately AU$122 million.

In terms of the perks of the transaction, Miri Halperin Wernli, co-founder and CEO of Creso Pharma, said earlier this year, “This arrangement with PharmaCielo is an incredible opportunity for Creso Pharma shareholders to benefit from being part of a best in class and well-capitalized global medicinal cannabis company."

Don't forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

AU$4 Billion Galaxy/Orocobre Merger to Create Top 5 Lithium Company

Australia’s Orocobre (TSX:ORL,ASX:ORE) and Galaxy Resources (ASX:GXY,OTC Pink:GALXF) agreed this week to join forces in a AU$4 billion “merger of equals.” The deal comes as demand for lithium for electric vehicle (EV) batteries continues to pick up pace.

Once the merger is complete, the new company will become a top five lithium chemicals company globally — and top three outside of China — with production capacity of around 40,000 tonnes of lithium carbonate equivalent per year.

“The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium,” Galaxy Chairman Martin Rowley said.

Keep reading... Show less

IIROC Trading Halt – TMRR

The following issues have been halted by IIROC:

Company: Tempus Resources Ltd.

Keep reading... Show less

Cleantech Investing in Australia

Climate change is a looming issue for Australians, with 82 percent concerned about bushfires and 81 percent worried that drought or flooding will affect crop production and food supply.

This is where conscious investors look to the cleantech sector, which covers everything from renewable energy to low-emission technologies to water technology to battery storage and more.

What should investors know about cleantech in Australia before they jump in? Read on for a look at key factors, including market size, the industries encompassed by cleantech and big players to watch.

Keep reading... Show less

Galaxy Resources Limited Announcement

Galaxy Resources Limited (ASX: GXY) ( Company ) advises that the following announcement has been made to the Australian Securities Exchange which appears on the Company’s platform (ASX):

  • Becoming a substantial holder

The announcement can be viewed at:

Keep reading... Show less

Hastings Technology Metals Ltd Signs Major Offtake Contract with thyssenkrupp

Perth, Australia (ABN Newswire) – Australia’s next rare earths producer Hastings Technology Metals Limited (ASX:HAS) is pleased to announce that it has executed a binding offtake contract with thyssenkrupp Materials Trading GmbH (TK), for high-grade mixed rare earth carbonate (MREC) from the Company’s Yangibana Rare Earths Project (Yangibana) in the Gascoyne region of Western Australia.


– Hastings announces signing of a major offtake contract for the supply of its high grade product from its Yangibana Rare Earths Project in Western Australia to thyssenkrupp Materials Trading GmbH.

Keep reading... Show less

Top News

Related News