Privateer To Release Tilray Shares Over Next Two Years

Marco Green
June 13, 2019

The deal means that Privateer can only sell its shares under certain circumstances over a two-year period. The letter of intent also establishes that Tilray and Privateer will join in a downstream merger. During the first year following the closing of the merger, shares will be released only pursuant to marketed offerings and/or block trades to institutional investors or via stock sales to strategic investors, all of which would be arranged at the sole discretion of Tilray. According to the company, these shares now represent 77% of Tilray's total shares outstanding.

"So these lock-up extensions, and orderly release of shares will ensure that investors are not going to be caught off guard with the stock price".

The deal removes any concern that Privateer could flood the market with Tilray stock, and gives Privateer's investors a tax-free way to benefit from its stake in the US$3.8 billion cannabis firm, the companies said Monday. Tilray has 80.6 million shares outstanding and a float of 22 million shares, according to Bloomberg. While the move into the United States market is a sensible one, considering the fact that it is the most lucrative cannabis in the world, it is surprising that the company is simultaneously making a move into Europe.

"Privateer will disappear. Tilray will bear a neighborhood of shareholders that bear noteworthy of the stock for the next one three hundred and sixty five days, after which there'll be a behind originate of stock onto the market within the second three hundred and sixty five days following the merger", talked about Michael McCloskey, who became formerly invested in Tilray thru his funding firm GreensKeeper Asset Management. They were up 328% at the end of the lock-up period, and have since fallen by 62% to $US43 apiece.

The advanced transaction will within the ruin behold Privateer divest from all its holdings and switch steady into a shell entity, with its predominant shareholders without lengthen receiving Tilray stock in a "tax efficient" design. IFP Advisors Inc now owns 1,729 shares of the company's stock valued at $130,000 after purchasing an additional 655 shares in the last quarter.

"The transaction effectively flips the control of stock from Privateer to TLRY, and provides TLRY increase ability to manage its public float", wrote Cowen analysts Vivien Azer and Steven Schneiderman in a note out Monday.

Shares of Tilray Inc (NASDAQ:TLRY) were up 14.7% during trading on Monday. The stock has a consensus rating of "Hold" and an average target price of $83.85. Cronos was up more than 3%, Aurora Cannabis traded up 2.36% and Canopy Growth traded up 2.23%. Piper Jaffray Companies also issued estimates for Tilray's Q2 2019 earnings at ($0.35) EPS, Q3 2019 earnings at ($0.34) EPS, Q4 2019 earnings at ($0.42) EPS, FY2019 earnings at ($1.38) EPS, Q1 2020 earnings at ($0.40) EPS, Q2 2020 earnings at ($0.34) EPS, Q3 2020 earnings at ($0.21) EPS, Q4 2020 earnings at ($0.11) EPS and FY2020 earnings at ($1.05) EPS.

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