The Globe and Mail reports in its Tuesday edition that Desjardins Securities analyst John Chu moved his rating on Meta Growth to "tender" from "buy," and cut his share target to 14 cents from 25 cents, following High Tide's offer to buy the Canadian retailer of legal recreational cannabis. The Globe's David Leeder writes in the Eye On Equities column that Mr. Chu says in a note: "While our previous target of 25 cents suggests significant upside potential, it is predicated on Meta winning a significant number of retail licences in the next 24 months, which thus far in 2020, it has not done. With the uncertainty and risk of having to consistently win new retail licences and the sales pressure of its Alberta stores, the offer value seems fair."
Meta shareholders will receive 0.824 of a common share of High Tide for each Meta share. This equates to about 13.3 cents a share. Meta's board is in full support of the offer. Echelon Partners analyst Andrew Semple says, "We believe this offer represents a continuation of the Meta Growth thesis in a larger and stronger platform, and therefore recommend Meta shareholders vote to approve the arrangement agreement at the special shareholder meeting to be held in October."
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