SASKATOON, Saskatchewan--(BUSINESS WIRE)--CanniMed Therapeutics Inc. (“CanniMed” or the “Company”) (TSX: CMED) today announced that, in response to the unsolicited, opportunistic offer by Aurora Cannabis Inc. acknowledged in our press release issued on November 24, 2017 (the “Hostile Bid”), the Board of Directors of CanniMed (the “Board”) has adopted a shareholder rights plan (the “Plan”). The purpose of the Plan is to ensure that all shareholders are fairly treated, well informed and not subject to coercive bids.

The Plan prevents Aurora from acquiring any CanniMed shares other than those tendered to its Hostile Bid or from entering into any lock-up agreements in respect of its Hostile Bid other than those it has already entered into and filed on SEDAR (the “Current Lock-up Agreements”) in order to (i) encourage fair treatment of the shareholders of the Company in connection with any other potential acquisition transaction of the Company, (ii) ensure that CMED shareholders have the opportunity to vote on the previously announced acquisition of Newstrike Resources Ltd. (“Newstrike”) by the Company, and (iii) ensure that shareholders are not coerced into tendering to the Hostile Bid.

The Plan is not intended to deter the Hostile Bid or any other bid, and as described below, the Hostile Bid is deemed to be a “Permitted Bid” under the Plan, and the Current Lock-up Agreements are deemed to be Permitted Lock-up Agreements under the Plan, even though they would not otherwise meet the typical requirements of being a Permitted Lock-up Agreement.

We remind shareholders to take no action with respect to the Hostile Bid until such time as the Board can make a recommendation.

As previously disclosed, CanniMed has formed a special committee of independent directors (the “Special Committee”) to consider the Hostile Bid. The Special Committee is reviewing the Hostile Bid, in consultation with its legal and financial advisors, and will respond in due course. The Special Committee unanimously recommended to the Board that it approve the Plan.

The Company is very concerned that by secretly obtaining lock-up agreements from four of CanniMed’s shareholders, Aurora may be depriving shareholders of their ability to vote in respect of the Newstrike deal or may coerce them to accept the Hostile Bid. By adopting the Plan, the Company hopes to ensure that shareholders are afforded the opportunity to make an informed decision when deciding how to vote for the Newstrike deal and whether to tender to the Hostile Bid, among other things.

Permitted Bid and Permitted Lock-up Agreement

A Permitted Bid under the Plan is a take-over bid that, among other things: is made to all Shareholders; is made in compliance with applicable securities laws, including the requirement that it remain open for acceptance by shareholders for a minimum of 105 days; is supported by a majority of shareholders other than the bidder (and its affiliates, associates and joint actors), and in the event that the minimum tender condition is satisfied, the offeror must publicly announce such fact and keep the bid open for at least a further 10 business days and must allow shares to be deposited or withdrawn at any time until the offeror takes and up and pays for shares under the bid.

A Permitted Lock-up Agreement under the Plan is a lock-up agreement that, among other things, is approved by the Board. The Current Lock-up Agreements are deemed to be Permitted Lock-up Agreements provided that after the date hereof they are not amended or modified without the approval of the Board and provided further that no additional shares are made subject to such agreements.

Share Purchase Rights

In connection with the adoption of the Plan, the Board authorized the issuance of one Share Purchase Right (a "Right") in respect of each outstanding common share of CanniMed as of the close of business on November 28, 2017 (and each common share issued thereafter, subject to the limitations set out in the Plan). Under the terms of the Plan, the Rights will become exercisable on the 10th trading day following the earliest of (the earliest of such time, the "Separation Time"): (i) the date that a person or the Company announced that a person became an Acquiring Person (as defined below), (ii) the date that a person commences or announces an intention to commence a take-over bid (other than a Permitted Bid), and (iii) the date that a Competing Bid (as defined in the Plan) or a Permitted Bid cease to qualify as such. The Separation Time is being deferred in respect of the Hostile Bid.

A person becomes an Acquiring Person when it, together with its affiliates, associates and joint actors, acquires beneficial ownership of 20 per cent or more of the outstanding common shares of CanniMed, subject to the ability of the Board to waive the application of the Plan. Aurora is not considered an Acquiring Person as it is a Grandfathered Person under the Plan. Should Aurora purchase any CanniMed shares, enter into any new lock-up agreements or if the Current Lock-up Agreements cease to be Permitted Lock-up Agreements, Aurora will become an Acquiring Person and the Separation Time will occur.

Following the acquisition of 20 per cent or more of the outstanding common shares of CanniMed by any person, each Right held by a person other than the acquiring person (and its affiliates, associates and joint actors) would, upon exercise, entitle the holder to purchase common shares of CanniMed at a substantial discount to their then prevailing market price.

The Plan is subject to the jurisdiction of the Toronto Stock Exchange and will terminate on the earlier of: (i) the date that is six months after the Plan's effective date (with extensions in the event of litigation), and (ii) the date that Rights are redeemed under the Plan.

A more detailed summary of the Plan will be set out in CanniMed’s Material Change Report which will be filed with the Canadian securities regulatory authorities and will be available at www.sedar.com. A full copy of the Plan will also be available at www.sedar.com.

Advisors

Kingsdale Advisors is acting as strategic shareholder and communications advisor. AltaCorp Capital Inc. is acting as financial advisor to the Board and Borden Ladner Gervais LLP is acting as legal advisor to the Board. Cormark Securities Inc. is acting as financial advisor to the Special Committee and Stikeman Elliott LLP is acting as legal advisor to the Special Committee.

About CanniMed Therapeutics Inc.

CanniMed is a Canadian-based, international plant biopharmaceutical company and a leader in the Canadian medical cannabis industry, with 16 years of pharmaceutical cannabis cultivation experience, state-of-the-art, GMP-compliant production process and world class research and development platforms with a wide range of pharmaceutical-grade cannabis products. In addition, the Company has an active plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications.

The Company, through its subsidiaries, was the first producer to be licensed under the Marihuana for Medical Purposes Regulations, the predecessor to the current Access to Cannabis for Medical Purposes Regulations. It was the sole supplier to Health Canada under the former medical marijuana system for 13 years, and has been producing safe and consistent medical marijuana for thousands of Canadian patients, with no incident of product diversion or recalls.

For more information, please visit our websites: www.cannimed.ca (patients) and www.cannimedtherapeutics.com (investors).

Notice Regarding Forward Looking Statements

This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of CanniMed to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to CanniMed’s expectations with respect to: the timing and outcome of the proposed acquisition of Newstrike; the Hostile Bid; and the effects of the Plan. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

In respect of the forward-looking statements and information concerning the Newstrike transaction, the Hostile Bid and the Plan, CanniMed has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time, including expectations and assumptions relating to the Hostile Bid and the effect of the Plan. There can be no assurance that the proposed acquisition of Newstrike will occur, that the conditions in the offer by Aurora will be satisfied or whether the Plan will be effectively in achieving its stated goals. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Actual results could differ materially from those currently anticipated due to a number of factors and risks. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date.

CanniMed does not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf, except as required by applicable law.