Kitchen Culture's proposed stake purchase in sanitiser maker falls through

KITCHEN Culture has decided not to proceed with the purchase of a 40 per cent stake in Beijing Anxin Health Products Co, the Catalist-listed kitchen solutions provider said in a bourse filing on Monday night.

Beijing Anxin is a Chinese manufacturer of medical supplies such as masks and sanitisers. It owns and is licensed to use intellectual properties including "AnXin" brand sanitisers.

In May this year, Kitchen Culture entered into a non-binding term sheet with Guangdong Fon-neus Environment Protection Technology for the proposed acquisition.

Kitchen Culture said then that the purchase consideration for the proposed stake purchase will be based on a valuation that is five times the price-to-earnings ratio of Beijing Anxin.

The number of consideration shares to be issued will be 40 per cent of that valuation divided by 23 Singapore cents.

Kitchen Culture said it would satisfy the purchase consideration by issuing new ordinary shares to seller Guangdong Fon-neus, based on an exercise price of 23 Singapore cents per share.

This represents a 15 per cent premium over the closing price of 20 cents per share on May 19, 2020, and a 15.3 per cent premium over the volume-weighted average price of the shares at 19.95 cents on May 19, which is the last market day the shares were traded on the Singapore Exchange prior to the date of the term sheet.

However, no definitive agreement has been signed since then, and the term sheet has been automatically terminated following its expiry on Aug 31, the company said on Monday.

Kitchen Culture added that the parties involved have mutually agreed not to proceed with the proposed deal and have ceased their negotiations in relation to it.

The termination of the term sheet is not expected to have any material impact on the net tangible assets per share and earnings per share of the company for the financial year ending June 30, 2021, Kitchen Culture said.

Shares of Kitchen Culture were trading at 11.2 Singapore cents as at 9.48am on Tuesday, down 0.1 cent or 0.9 per cent.