AGTech agrees to buy China lottery equipment company

AGTech Holdings says it agreed to buy a Chinese lottery equipment and design company for HK$489.5 million ($63.1 million). The Hong Kong-listed company said in a stock exchange filing it will pay no more than HK$189.5 million in cash and $300 million through a share issue. AGTech will issue a total of 178,571,428 shares representing 4.06 percent of the existing issued share capital of the company as of the date of the announcement.
The shares will be issued at $1.68, a premium of about 10.5 percent to the closing price of the stock on Tuesday.
AGTech has also agreed to pay a bonus option, linked to business performance milestones, including the number of provinces in which its lottery game can launch sales in the future.
The option entitles the vendors to subscribe for up to 150,000,000 option shares at HK2.00 each.
AGTech didn’t name the company it’s acquiring. The sellers are British Virgin Islands-based King Achieve Limited and Immense Wisdom Limited, which hold 45.4 percent and 54.6 percent of the company respectively.