Aurora Cannabis urged its shareholders to reject an unsolicited $272 million hostile takeover bid from Curaleaf Holdings, saying the offer is inadequate and undervalues parts of its business.

Aurora's Chief Executive Miguel Martin added that the cannabis company's standalone strategy to expand its medical cannabis business internationally should start to bear fruit in the next six months and plans to outline the strategy in greater detail in the coming weeks.

Aurora on Wednesday formally recommended to shareholders that they should reject the offer from Curaleaf, which was made last month. In an interview, Martin said that the offer undervalues its high-margin European medical business and dilutes investor voting power, while using Aurora's cash pile to absorb Curaleaf's heavy debt load.

"Medical cannabis is probably the best part of the cannabis ecosystem," Martin said. "It's got the best margins, and it's the steadiest, it's the fastest growing."

On Wednesday, the Aurora board said that the offer is not in the best interest of shareholders and unanimously recommended that shareholders reject Curaleaf's offer of $4 a share, made up of 0.3463 of a Curaleaf subordinate voting share and 75 cents in cash. The deal is subject to a maximum cap of $5 a share.

Later on Wednesday, Curaleaf defended the bid, saying its proposal provides a 45% premium, offers immediate exposure to a large and diversified cannabis company, and criticized Aurora's leadership for still failing to engage in price discussions or deliver on past turnaround promises.

"Aurora's response sidesteps the fundamental question facing shareholders: if management's plan creates greater value than our offer, where is the evidence?" said Executive Chairman and Chief Executive Boris Jordan. "We remain ready and willing to engage constructively with Aurora to discuss this offer at any point."

Aurora's shares have been under pressure over the last year, falling 20% and recently traded at 5.62 Canadian dollars ($4.15).

Martin said that Curaleaf's offer is also opportunistically looking to use Aurora's $149 million liquidity to help absorb its own heavy debt load of over $1 billion. It also is structured to capitalize on Aurora's depressed share price, while Curaleaf's is high. "From their standpoint, the timing is great," Martin said. "We're trading at an all-time low and they're trading at an all-time high from a multiple standpoint."

Aurora added the capped bid offers no meaningful change-of-control premium for its high-margin European operations and that it would subject investors to a share structure that would leave them with a 3.2% vote despite an equity stake of 7.7%.

Aurora's board on Wednesday reiterated its confidence in its standalone plan, citing record international revenue and high margins. It also cited recent expansion of its EU-GMP cultivation and manufacturing capacity, or that which has passed European Union good-manufacturing-practice guidelines.

Martin noted that the company is still open to offers. "If Curaleaf or someone else comes with a different offer, we'll absolutely look at it," Martin said.

Curaleaf's formal tender is open for acceptance until Dec. 1.