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Green Growth Brands Inc. has formally filed its unsolicited offer to buy Aphria Inc., one of Canada’s largest cannabis companies.

In the takeover bid made public on Tuesday, Green Growth said it would give investors in Aphria 1.5714 shares of the Columbus, Ohio-based company for each Aphria share. Green Growth stock closed Tuesday at $5.98. At that price, the deal would be worth $2.3-billion. Aphria has a market capitalization of $2.35-billion.

Green Growth is formalizing its bid three weeks after it was first announced and nearly two weeks after Aphria’s chief executive and co-founder said they would step down from their executive roles in the coming months. The Leamington, Ont.-based cannabis grower has been facing scrutiny about its deal-making and slumping share price.

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With a market capitalization of $1.1-billion, Green Growth is a much smaller company than Aphria. It’s backed by the Schottenstein family, who are Ohio-based billionaires who own significant stakes in American Eagle and DSW Shoes. Green Growth doesn’t have any operations in Canada today but buying Aphria would make the little-known company one of Canada’s largest cannabis firms by sales.

The bid will remain open until May 9.

In late December, Green Growth revealed that it was planning to launch a takeover of Aphria worth $2.8-billion, or $11 a share. However, the figures provided were “based on a valuation of $7 a share" of Green Growth, even though its stock had been trading at $4.98. To bridge the gap, Green Growth said it “expects to complete” a $300-million financing at $7 a share – a transaction that it seemed to believe would boost the stock price, even though few details were provided.​

Green Growth's formal offer did little to answer questions about its unusual takeover strategy.

It said Tuesday that a company named All Js Greenspace LLC has agreed to purchase up to $150-million of the planned financing. All Js Greenspace is a holding company connected to the Schottenstein family.

In effect, the family behind Green Growth has said it will invest more in the company if the Aphria takeover is successful. In a press release Tuesday, Green Growth disclosed that All Js is a “related party.” However, the connection only complicates a web of connections between Aphria, Green Growth and Green Growth’s backers, ties that both parties have either disputed or dismissed as irrelevant.

Aphria has said it has established an independent committee of directors to review the offer and any others. Last month, Aphria called Green Growth’s proposed bid “quite risky” in a press release, adding that it undervalues Aphria and is “based on a hypothetical version of its own shares.”

The offer also comes a year after Aurora Cannabis Inc. acquired CanniMed Therapeutics Inc. for a $838-million, a deal that started off hostile and then turned friendly but only after Aurora agreed to sweeten its offer. Market observers expect the pace of consolidation in the cannabis sector to intensify this year, as producers search to gain scale and lower per-gram costs.

Aphria became vulnerable to a takeover attempt after two short-sellers published a report in early December alleging the company vastly overpaid for assets in the Caribbean and Latin America. The company’s stock lost half its value in the three days after the report was released, falling to below $5, and has since largely recovered much of those losses. On Tuesday, shares of Aphria closed at $9.43.​

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