Iplayco Corp Ltd (CVE:IPC), the children's play equipment specialist, announced Thursday that it will be acquired by Philippines-based retail and real estate conglomerate TSL888 Investments Inc for around C$5.11 million in cash.
TSL will acquire all of the firm’s shares under a plan of arrangement for C$0.50 a pop, representing a 61.29% premium over Iplayco's closing share price yesterday (October 30).
Iplayco's board has unanimously approved the plan and recommends that its shareholders vote in favour.
"Iplayco has managed to expand sales significantly in recent years but translating that growth into the consistent profitability equity investors expect has proven challenging, and this is reflected in the price of the company's shares," said Scott Forbes, the president and CEO at Iplayco.
"As a result, our management team has been exploring strategic alternatives to provide shareholders an immediate and meaningful increase in the value of their shares, seeking a plan that is robust and features a high degree of certainty.
"Iplayco management and directors feel strongly that under present circumstances, TSL is offering our shareholders an attractive premium over the current value of their investment and that it should be accepted."
If it completes, Iplayco will become a wholly-owned subsidiary of TSL, which owns and operates seven shopping malls with over 2.2 million sq ft of retail space, attracting over 40 million visitors annually.
"Iplayco has a long history of providing play structures that children around the world enjoy every day and is a leader in its industry," said TSL executive Sharlene Faye Lim.
"As a private company, Iplayco will be able to make strategic investments for sustainable and profitable growth, while remaining agile and focused on operational excellence. We are excited to partner with Iplayco's management team as it embarks on this new chapter," she added.
In connection with the deal, TSL has agreed to provide Iplayco with a six-year loan to the tune of US$2 million.
The closing of the deal is subject to various standard conditions, including the receipt of Iplayco shareholder, court and regulatory approvals.
A special meeting of Iplayco's shareholders will be held as soon as practicable and the arrangement is expected to close in December this year.
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