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Canadian marijuana retail company Fika Cannabis bid 36 million Canadian dollars ($26.6 million) at auction to acquire retail chain Fire & Flower Holdings, according to a report filed by Fire & Flower’s court-appointed insolvency monitor.
The $36 million purchase price “is CA$12.3 million more than the value of the stalking horse bid” put forward by Fire & Flower’s majority shareholder, Alimentation Couche-Tard, according to the Aug. 26 report by monitor FTI Consulting Canada.
That stalking-horse bid was opposed by a group of other Fire & Flower shareholders, although a judge rejected their counterproposal in July.
Fika’s winning bid for Fire & Flower was announced earlier this month, but the value was not disclosed.
FTI Consulting called Fika’s offer “the best outcome for (Fire & Flower’s) business” and said it left money on the table for some of the insolvent retailer’s creditors.
The CA$36 million bid “is sufficient to repay all of (Fire & Flower’s) secured liabilities and leaves a significant recovery available to (the company’s) unsecured creditors,” according to FTI Consulting’s report.
Since the deal offers a going-concern solution to Fire & Flower’s insolvency, the monitor believes “a substantial number of F&F’s trade suppliers will continue to contract with (Fire & Flower) … and it is expected that a substantial number of the employees will be provided offers to continue their employment with F&F following the implementation of the transaction.”
Fika’s deal for Fire & Flower is subject to court approval, with a proposed closing date of Sept. 8.
It is still unclear exactly which Fire & Flower assets Fika is buying, and Fika has not responded to interview requests from MJBizDaily.
Fire & Flower, one of the biggest cannabis retailers in Canada, entered creditor protection in June.
Solomon Israel can be reached at solomon.israel@mjbizdaily.com.
