Curaleaf Holding's sweetened offer for Aurora Cannabis is aimed at winning over institutional investors and forcing the target company into negotiations.

Curaleaf Chairman and Chief Executive Boris Jordan said the raised offer, made earlier Monday, was also designed to preempt competing bids from being entertained, while aligning with a wave of institutional investors who he said are steadily accumulating shares of Aurora since Curaleaf made its initial offer in August.

"We are constantly in conversations with institutions, and a lot of those institutions basically told us they would support a bid that would be around this level," Jordan said in an interview.

The new offer, for $5 a share, values Aurora at $324.2 million, and ups its earlier offer by about 25%. Even without access to Aurora's books, Jordan said the Curaleaf offer represents a bid to flush out rival suitors and force management to the table.

"Since we've heard that they're talking to other people, we decided to preempt any other bids by increasing our offer," Jordan said. "So we are basically forcing the competition, if they're there, to really put up or shut up."

Aurora Chief Executive Miguel Martin said Curaleaf's offer was not a formal revised bid, and that the company had not received the necessary materials to fully evaluate the proposal. The company urged shareholders not to tender their shares.

"While the announcement appears intended to address certain concerns Aurora raised regarding Curaleaf's initial proposal, there is no formal revised offer for the Special Committee to evaluate at this time," an Aurora spokesperson said. "Once a formal revised offer is filed, the Committee, together with its financial and legal advisors, will conduct a thorough review before making a recommendation to the Board."

Aurora's shares closed up 14% on Monday at 6.37 Canadian dollars ($4.47).

Jordan said he has met with some new Aurora investors in recent weeks to make his case. "I can tell you, unanimously, every one of them thinks this deal makes a huge amount of sense," he said.

The new proposal represents an 86% premium over Aurora's unaffected August share price. Curaleaf said that its plan is to establish a dominant global operator with over $1.5 billion in annual revenue spanning 17 countries.

The new offer also increases the maximum consideration per Aurora share to $6 from a previous $5.

In September, Aurora urged its shareholders to reject a previous unsolicited hostile takeover bid from Curaleaf valued at $272 million, saying the offer is inadequate and undervalues parts of its business.

At the time, Martin said that the cannabis company's standalone strategy to expand its medical cannabis business internationally should start to bear fruit in the next six months.