Why Sundial Growers Stock Grew 12% Today
Shares of Sundial Growers (NASDAQ: SNDL) grew 12.3% taller on Tuesday (as of 1:30 p.m. ET) after the Canadian cannabis company announced that it has submitted a "stalking horse bid" to acquire insolvent Hexo (NASDAQ: HEXO) subsidiary Zenabis Global for an undisclosed sum.
Hexo owns Zenabis, having acquired the company last year for $235 million Canadian dollars ($181.87 million). Prior to that happening, however, Sundial had loaned Zenabis CA$58.9 million in December 2020, the bulk of which remains outstanding.
Last week, Zenabis filed for creditor protection under Canada's Companies' Creditors Arrangement Act (CCAA), similar to a U.S. company filing for a Chapter 9 bankruptcy in order to restructure its operations and then continue in business. As part of this creditor protection process, Sundial says it offered to acquire Zenabis' "380,000 square foot indoor growing facility located in Atholville, New Brunswick with an annual production capacity of approximately 46,000 kgs of dried cannabis" and a "decommissioned 255,000 sq. ft. indoor facility in Stellarton, Nova Scotia" that Zenabis formerly used for cannabis packaging and processing.
Source Fool.com
