Tech: Fatfish Blockchain plans strategic tie-up with Swedish tech group; shares jump

Internet company Fatfish Blockchain (ASX:FFG) had an interesting corporate announcement for the market this morning.

The company said it had received and approved a share-based offer to acquire a Swedish subsidiary, Fatfish Global Ventures AB (FGV), in which it holds an 81 per cent interest.

The offer came from Abelco Investment Group, which is listed on the NGM Nordic MTF — a secondary European exchange with operations in Sweden.

To pay for it, Abelco will issue 704,410,746 new shares priced at 0.12 Swedish kronas (SEK). At current exchange rates, the total consideration of 84.5m SEK amounts to around $12.7m, Fatfish said.

So under the terms of the proposed deal, Fatfish end up with a 50.1 per cent stake in the merged entity, valued at $12.7m. As at 10:15am EST today, the company’s entire market capitalisation on Bloomberg was $11.1m.

Shares in Fatfish got a nice boost in morning trade:

Subject to approval

Before the deal goes ahead, Abelco shareholders will need to approve it at an annual general meeting, while Fatfish will need to get the all clear form investors to spin out its subsidiary.

Fatfish CEO Kin Wai Lau said the deal provided an opportunity for the Singapore-based company to accelerate its growth into Europe.

ALSO READ: Fatfish lands 20pc of ‘blockchain fund of funds’ after reeling in a discount

Representatives from both companies said the proposed merger would offer more flexibility and improved pathways to commercialisation as they pursued investment opportunities in the early-stage fintech space.

“We are impressed by the Swedish market and its advanced position and capabilities regarding startups in most areas, including fintech and other digital services,” Kin Wai said.

If the deal proceeds, the combined group will have more than 20 investments in its portfolio. Shares in Fatfish have hovered below the 2c mark throughout 2019, as the company pursues various blockchain and fintech-related investment strategies in multiple jurisdictions.

In other ASX tech news today:

Digital marketing company Impelus Limited (ASX: IMS) announced the resignation of its managing director and CEO, Neil Wiles. A major shareholder in the company, Wiles has worked at Impelus for 16 years and has been in the top job since 2005. Shares fell 15 per cent in morning trade following the announcement.

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