Aurora's move to bring in Peltz comes after competitors Canopy Growth and Cronos Group locked up multibillion-dollar investments from respected non-cannabis companies.
Peltz, the CEO of hedge fund Trian Partners, may be a newcomer to the growing marijuana industry, but he's always been an investor in the munchies. Aurora's tone seemed welcoming of Peltz's involvement, saying it will "work collaboratively and strategically to explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora's contemplated market segments".
The billionaire Nelson Peltz is getting into the cannabis business.
"I believe Aurora has a solid execution track record, is strongly differentiated from its peers, has achieved integration throughout the value chain and is poised to go to the next level", Peltz said in the statement. "I also believe that Canadian licensed producers, and Aurora in particular, are well positioned to lead in the development of the global cannabis industry as regulations evolve, with a strong, globally replicable operating model".
The back story. Edmonton, Alberta-based Aurora has accumulated Buy ratings lately from analysts who note its 20% market share of Canada's recreational pot sales and efficient production. He was previously a director at the food companies H.J. Heinz and Mondelez International and was also chairman and CEO of Triarc Companies, which owned Arby's and Snapple, as well as other consumer and industrial businesses.
"It isn't just about Nelson's Rolodex, it's what we believe Nelson will bring to the table and his advice and his thoughtfulness and frankly a lot of the help that we anticipate needing as we start to engage in some of these more significant discussions", Singer said.
Peltz immediately increases the likelihood of strategic partnerships, according to analysts. "In addition, we think ACB will be more patient in partnership selection than its peers, particularly regarding equity investment". The options will vest on a quarterly basis over four years, or faster if certain conditions are met, including "the consummation of certain defined transactions" and the share price hitting $41.36 for a specified number of trading days.