Singapore private equity investor expresses interest in mm2 Asia core business

A private equity investor here is looking to invest in one of mm2 Asia’s core businesses, says the media production company on Feb 7.

In a press release, mm2 Asia says it has received a non-binding term sheet expressing interest in a potential acquisition, involving taking a minority stake in one of its core businesses. The company did not specify the exact area involved.

The company adds that the discussions are “at a very preliminary stage” and did not identify the investor by name. 

“The terms of this term sheet are being deliberated by the board and the term sheet has not been entered into as at the date of this announcement,” says mm2 Asia. The board may also appoint an independent financial advisor if deemed necessary, it adds. 

“The term sheet, if entered into, would provide the investor with an exclusive period of 90 days to conduct a preliminary due diligence exercise, and for parties to prepare and negotiate the terms of the binding investment agreements,” says mm2 Asia. 

The news comes on the back of a rights issue announced on Feb 3, as the mainboard-listed company seeks to repay its $50 million 7% fixed rate notes, due on April 27.

See: mm2 Asia to tap shareholders for $52.15 mil with 1-for-1 rights issue

For each existing mm2 Asia share, shareholders are entitled to subscribe for a new mm2 Asia rights share at 4.7 cents, a hefty discount of 60.83% to the closing price of 12 cents apiece on Feb 1. 

If fully subscribed, the rights issue will raise some $54.65 million in gross proceeds.

Prior to the rights issue, mm2 Asia called for a trading halt on Feb 2, which was later extended till the end of Feb 5. 

As at 9.19am, shares in mm2 Asia are trading 3.3 cents lower, or 27.5% down, at 8.7 cents.