Newborn Town Inc. (SEHK:9911) entered into an agreement to acquire a 11.50% stake in NBT Social Networking Inc. from BGFG Limited for approximately HKD 730 million on October 9, 2021. Newborn Town acquire 21.850 million shares of NBT Social Networking Inc. The consideration comprises of two parts, being a cash consideration of HKD 281,580,000 and the issuance of 100 million Shares of the Newborn Town. Subject to the successful Completion, Newborn Town pay HKD 140.79 million in cash on or before the Post-Completion Payment Date or December 31, 2021, whichever is later; and pay another HKD 140.79 million in cash on or before the Post-Completion Payment Date or June 30, 2022, whichever is later. The net profit before taxation of NBT Social Networking for the year ended December 31, 2020 was approximately HKD 233.668 million.
The necessary resolution(s) having been passed by the shareholders of the Newborn Town at the shareholders? general meeting and by the Directors of the Company approving the Equity Transfer Agreement and all and any transactions contemplated hereunder and all and any matters related to such transactions in accordance with the requirements of the Hong Kong Listing Rules. All necessary filings, approvals, announcements and circulars required by SEHK, SFC and/or under the Hong Kong Listing Rules and/or under any other laws, rules, code and regulations of Hong Kong have been duly completed or obtained. Independent board committee recommended the Independent Shareholders to vote in favor of the transaction at the meeting to be held on December 17, 2021.
If the Acquisition has not completed on or before December 31, 2022, the Equity Transfer Agreement shall automatically terminate unless the parties to the Equity Transfer Agreement otherwise agree. Completion shall take place within 20 business days after the fulfilment (or waiver, if applicable) of all the conditions precedent under the Equity Transfer Agreement or such other date as the Vendor and Company may mutually agree upon in writing. CMBC Capital Holding limited acting as a financial advisor to Newborn Town Inc. and Somerley Capital Limited has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders for the transaction. Beijing PG Advisory Co., Ltd., is acting as an independent valuer.