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(The Nevada) market alone is going to get us $150 to $200 million of revenue. So to me, a $7 stock value is likely Green Growth CEO Peter Horvath

The bid is subject to a number of contingencies — Green Growth is looking to raise $300 million at a valuation of $7, a substantial premium to its closing price Thursday of $4.98. As recently as Dec. 18 however, the company’s stock price was below $3.50, half the valuation that it plans to use in the deal.

“We are very confident it’s a fair valuation. With our nine stores in total in Nevada, that market alone is going to get us $150 to $200 million of revenue. So to me, a $7 stock value is likely,” Horvath said.

He said it would be a number of weeks before any offer is actually put forward.

Photo by Dan Janisse / Postmedia

“It’s going to be a couple of weeks before we can actually act on our intentions. We put this release out today because we wanted to give the shareholders and the board and management the opportunity to understand what we want,” he added.

U.S. listed shares of Aphria surged as much as 22 per cent in after-hours trading in New York, as news of Green Growth’s intention to launch the bid broke.

The Leamington, Ont.-based company did not respond to a request for comment.

Green Growth is backed by Ohio’s Schottenstein family — known for fashion retailer American Eagle, where Horvath was Chief Global Commercial Officer.

Aphria, too, has a Schottenstein connection — in the summer of 2017, the Schottenstein family partnered with Aphria to bid for a marijuana cultivation licence in Ohio.

• Email: vsubramaniam@nationalpost.com | Twitter: VanmalaS

With files from Bloomberg News