NewMediaSpark takes over GlobalNet

NewMediaSpark takes over GlobalNet

NewMedia Spark is to take over the issued and outstanding share capital of its troubled investment GlobalNet Financial in a transaction valuing the company at $13.8 million.

The consideration payable will be 1.88 Spark shares for each share of GlobalNet Common Stock and 0.188 Spark shares for each share of Class A Common Stock in issue which represents a premium of 38 per cent over the price of a share of GlobalNet. The acquisition will involve Spark issuing up to 47.4 million new ordinary shares.

The takeover follows a spiralling decline in the value of the GlobalNet portfolio of businesses. The company recently announced plans to cut up to a hundred jobs, representing a third of its global workforce in an effort to cut losses and reduce cash burn.

In a statement, NewMedia Spark comments: "Although GlobalNet's underlying portfolio of assets are potentially of substantial value, the directors of Spark believe that GlobalNet currently lacks the balance sheet strength and resources to realise fully this value, and that the perceived financial weakness of GlobalNet is inhibiting its ability to negotiate attractive terms for divestment of its assets."

Spark directors says they intend to pursue an orderly wind down and disposal of GlobalNet's remaining media businesses. It is anticipated that this will leave the merged entity in a position to realise the value of GlobalNet's underlying portfolio of assets which include a 24% shareholding in EO, a 30% shareholding in Synaptic Systems and a holding of 5.3% of the outstanding ordinary shares in Spark itself.

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