Aurora stalks Cann-do company

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Australia's biggest medicinal cannabis company, Cann Group, is believed to be in the crosshairs of its largest shareholder.

Street Talk understands Canada's Aurora Cannabis Inc – that country's second largest cannabis company with a $C4.3 billion market capitalisation - is considering a formal approach to Cann Group's board about a takeover. Sources suggested there had been informal engagement between the two parties. 

Aurora's interest is believed to be pegged at about $4.50 a share, which would value Cann Group at about $500 million. 

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The company's shares last closed at $2.99, but hit a record high just above $4 in January.

Aurora is expected to offer scrip for Cann Group, which would ensure a two-way due diligence process should the ASX-listed cannabis company determine it is in their shareholders' best interest to explore a tie-up.

Cann Group declined to comment when contacted on Sunday night. 

Street Talk understands law firm Arnold Bloch Leibler is advising Toronto-listed Aurora.

It comes at a busy time for Aurora, which has been mopping up cannabis companies in the past six months, completing more than $1 billion worth of takeovers.

Aurora has kept a close eye on Cann Group throughout its brief history. The Canadian company owns a 22.9 per cent stake in the ASX-listed junior, and most recently upped its shareholding in December.

Cann Group was the first Australian company to receive a licence to research and cultivate cannabis for medical purposes.

If the deal was to happen, it would be a landmark transaction for Australia's cannabis players and the first M&A deal of its kind in the local sector. 

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