Northbridge's AdultShop.com Ltd will spin-off 3G mobile phone content developing subsidiary Loop Creative Pty Ltd, four months after acquiring it through an issue of 20 million ordinary and 80 million performance shares in August.
Northbridge's AdultShop.com Ltd will spin-off 3G mobile phone content developing subsidiary Loop Creative Pty Ltd, four months after acquiring it through an issue of 20 million ordinary and 80 million performance shares in August.
Adultshop will issue 20 million shares at 20c each under a prospectus to raise $4 million, while issuing 20 million shares to its own shareholders.
The company will also issue 5 million shares to Loop board staff and another 5 million at 20c through a placement.
An AdultShop announcement issued today said the directors of both companies had their interests would be best served by a separation of the two entities.
The company posted a $384,000 loss in September, following the relocation of the group's Canberra warehouse and operations in the final week of the financial year.
The full text of a company announcement is pasted below
AdultShop.com Ltd is pleased to announce that it intends to proceed with the spin off of its wholly owned subsidiary, Loop Creative Pty Ltd.
Loop, a leading global provider of social networking and community services on 3G mobile networks, was acquired by AdultShop on 1 August 2006. Subsequent to the acquisition, the directors of AdultShop and Loop have become increasingly of the opinion that the interests of Loop and the shareholders of AdultShop, would best be served by the separation of the two entities.
The board of Adultshop has therefore resolved to proceed with the recapitalisation and spin off of Loop.
It is proposed that the spin off of Loop will involve the offer of 20,000,000 ordinary shares in Loop at 20 cents per share under a prospectus to raise $4,000,000 (before costs). The Prospectus will be made available when the ordinary shares in Loop are offered (expected in the first Quarter of 2007). Anyone who wishes to take advantage of the offer will need to complete the application form that will accompany the Prospectus.
It is proposed that Adultshop shareholders will, via an in specie distribution, receive a total of 20,000,000 ordinary shares in Loop. Further details of the entitlement date for such distribution will be released in due course once the details have been finalised.
It is also proposed to issue a further 5,000,000 ordinary shares in Loop to Loop senior management and advisors and up to 5,000,000 ordinary shares in Loop at 20 cents per share to professional and sophisticated investors.
The proposed spin off of Loop is subject to shareholder, Australian Stock Exchange and other regulatory approvals and the preparation of necessary documentation. In particular, Adultshop will seek shareholder approval for the cancellation of the 20,000,000 ordinary shares and 80,000,000 performance shares in Adultshop held by the original vendors of Loop in consideration for the issue of 10,000,000 ordinary shares in Loop.
