Axington's proposed acquisition of Web technology firm falls through

AXINGTON'S proposed S$405 million acquisition of a 60 per cent stake in a Hong Kong Web technology company has fallen through as "various" discussions failed to materialise in the past month.

In a statement on Saturday, the Catalist-listed firm said no agreement has been made with Delta Investment Holding Group for a further extension of the long stop date or the exclusivity period - ended Aug 7 - for the acquisition of Veivo Web Technology, which was expected to result in a reverse takeover of Axington.

Accordingly, the memorandum of understanding (MOU) inked on July 8 has lapsed and will cease to have further effect.

Under the proposed acquisition, Axington was to pay at least S$30 million in cash, as well as issue and allot new shares at no less than S$0.19 per share to the vendor.

Veivo Web Technology has a paid-up capital of HK$100 (S$17.41). The company's wholly foreign-owned unit established in China is attempting to obtain full control over Beijing Ruihua Veivo Internet Technology by entering into control agreement(s) with the shareholders of Beijing Ruihua Veivo Internet Technology.

Beijing Ruihua Veivo Internet Technology is mainly engaged in operating an instant-messaging platform, paid-application store and cloud-application platform in China; it also has a telecommunications and information services business operating licence.

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The lapse of the MOU is not expected to have any material impact on the consolidated net tangible assets or earnings per share of Axington for the current financial year ending Dec 31, 2021.