16/03/2015 - 13:08

Gleneagle to buy biotech firm for $2m

16/03/2015 - 13:08

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Gleneagle Gold announced its intention to exit the resources sector through the back door today, with a proposal to buy a Melbourne-based unlisted biotechnology company for a share package worth $2 million.

Gleneagle to buy biotech firm for $2m

Gleneagle Gold announced its intention to exit the resources sector through the back door today, with a proposal to buy a Melbourne-based unlisted biotechnology company for a share package worth $2 million.

Gleneagle has offered Myostin Therapeutics 666.7 million shares, valued at 0.3 cents each, in exchange for full ownership of the biotech company, which is developing a therapeutic treatment for duchenne muscular dystrophy.

The deal is subject to certain conditions, including Gleneagle completing a $2.6 million capital raising in order to comply with ASX listing rules.

CPS Capital Group has been mandated to manage the raising, the price of which has yet to be determined.

Gleneagle will also issue 24.1 million shares to consultants as consideration for assisting with the formalities of the merger.

At least two Gleneagle directors will resign from the board if the merger is successful.

Myostin will have the right to appoint three of its own nominees, one of whom will be chairman and another managing director of the combined company.

The Gleneagle board includes director Ian Love, who also owns Coco’s Riverside Bar and Restaurant in South Perth, and Wayne Loxton, who is also executive chairman of Yowie Group.

Myostin was founded by managing director Kevin Healey, a Melbourne-based businessman who has also founded listed companies including Medica, Cytopia, Alchemia and Hunter Immunology.

Cytopia was bought by Canadian-based YM BioSciences in 2010 and is no longer listed on the ASX.

The deal will be voted on by Gleneagle shareholders at a meeting in May.

Gleneagle shares closed 50 per cent higher at 0.3 cents per share.

 

See below for our updated list of WA-related backdoor listings.

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