mig33 to be acquired by Latin Gold; heading for reverse IPO

mig33 will be acquired in return for the issue of 720M shares to its various shareholders. How will this move pan out for both companies?

mig33

Singapore- and Indonesia-based social entertainment platform mig33 was announced to have been acquired by Latin Gold, a firm dealing with commodity exploration and development opportunities listed on the Australian Securities Exchange (ASX).

According to Proactive Investors, Latin Gold has been granted a trading halt last afternoon, and will remain in place until opening of trade on Friday, January 24, 2014. mig33 will be acquired in return for the issue of 720 million shares to its various shareholders. Upon completion of the transaction, Latin Gold shareholders will own approximately 30.5 per cent of the merged group.

This also sees mig33 moving into reverse IPO, where if a non-listed company owns more shares of a listed company than the original shareholders, the non-listed company will automatically take on the characteristics and status of the listed company.

Relaunched as a beta in August 2013, mig33′s platform, accessible on Android, WAP and the Web, includes services such as miniblog, chatrooms, virtual gifts and games. Targeting over 3.5 billion people, mig33 is said to be generating revenue, and offers Latin Gold shareholders “access to an exciting and significant growth opportunity in the IT sector”.

The official statement noted, “Part of this business model was developed to build on the success of the China-based Tencent Holdings, which now has a market capitalisation of over US$120 billion.”

Read also: Is IPO a plausible exit strategy for Singapore startups?

Steven Goh, Andy Zain, John Lee, and Dmitry Levit, who are directors of mig33, will be appointed to the Latin Gold Board, and three Latin Gold Directions will resign. It was not specified who the three from the Latin Gold board will be.

According to the release, the mig33 Group has over 90 employed staffers, and will be provided a fully recourse loan of US$500,000. The loan, supplied by Latin Gold, will become immediately repayable if completion of the transactions does not occur within five months.

Key terms to the proposed transaction are:
(a) The combined Latin Gold and mig33 Group will have net cash resources of at least A$5 million
(b) All necessary shareholder approvals are obtained, including:

(i) Holders of shares in the mig33 Group approving the transaction and the merger agreement
(ii) Latin Gold shareholders approving the transaction in accordance with applicable ASX Listing Rules including a change in the nature and/or scale of Latin Gold’s activities in accordance with ASX Listing Rule 11.1.2, the allotment and issue of the Latin Gold shares, the election of new Directors, share consolidation, and a change of Company name
(c) All necessary ASX, governmental and regulatory consents and approvals being obtained for completion and for the continued listing and quotation of Latin Gold shares on ASX following completion
(d) Latin Gold complying with any requirements of ASX including, if necessary, receiving conditional approval to have its shares readmitted to trading on the Official List of ASX and those conditions being satisfied to the reasonable satisfaction of the parties (as required by ASX Listing Rule 11.1.3)

Read also: 2 startups with IPO share experiences of growing their companies

It is anticipated that a detailed notice of the general meeting will be available to Latin Gold shareholders by mid March, with the meeting to consider the proposed transaction to be held by late April.

Elaine Huang

Elaine is a fervent believer that if there ever is a zombie apocalypse, we will all be snapping away at them with our phones and posting them onto Instagram. A Mass Communication graduate of Ngee Ann Polytechnic's School of Film and Media Studies, she enjoys writing about technology and entrepreneurs. When not hashtagging her way through all sorts of trouble, Elaine is probably contemplating how to write in the third person.

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