Liberty Health Sciences (CNQ: LHS) has started recovering from the damage produced from the Hindenburg report late last year, but it might find its chances of pulling through more difficult. Aphria has already decided to withdraw its support for the company and, so far, investors haven’t seemed too impressed with how the Hindenburg saga is progressing. Now, some analysts are beginning to believe that Liberty Health could become a target for takeover, and one potential source would most likely be Green Growth Brands.
After the Hindenburg report was released, Liberty Health immediately tried to put the company back on course, removing several high-ranking executives and shuffling around the board of directors. There have been other personnel changes over the past two weeks, as well, all of which are meant to restore consumer and investor confidence.
That management shakeup, coupled with Aphria’s exit, is leading some analysts to assert that Liberty Health does not have the resources it needs to continue pushing forward. They feel that Green Growth, which has a history of proposing hostile takeovers of cannabis companies, could try to make a power grab on the company.
Aphria gave Liberty Health its start. It was behind all the assets currently held by the company – including Schottenstein Aphria in Ohio and Chestnut Hill Tree Farms in Florida. Green Growth is controlled by the Schottenstein family, one of the richest families in America. Jay Schottenstein is responsible for the creation of Schottenstein Aphria LLC, which includes four separate entities. Schottenstein controls 49.9% of all of them and Liberty Health controls the remaining 50.1%.
The Schottensteins are friends and business partners with the Serruya family. They jointly own Cold Stone Creamery and Samuel Serruya is the largest investor of Liberty Health. He owns 64 million shares and his son, Aaron Serruya, is on the company’s board of directors.
These connections are going to prove relevant should Green Growth decide to move on Liberty Health. It definitely has the financial resources to push for control of the company and, with the help of the Serruyas, almost undoubtedly won’t have any substantial resistance in taking over the operations.