econtext Asia (01390) said its controlling holder Digital Garage, Inc. proposes to privatize the company at HK$4.09 per share, representing a premium of about 41% over the closing price of HK$2.9.
The total cash payment under the proposal will be about HK$880.5 million which will be funded from a new credit facility made available to the offeror by Sumitomo Mitsui Banking Corporation.
The offeror believes that the price of companies in payment related businesses has risen significantly due to the strong investment appetite of global investors. As a result, econtext Asia will require substantially more funding than it previously expected in order to facilitate its ongoing acquisition strategy. While econtext Asia is currently exploring opportunities to invest in certain companies as part of its ongoing expansion, the offeror believes that the current valuations of these companies make it difficult for econtext Asia to execute acquisitions on its own.
econtext Asia has applied for the resumption of trading in shares this morning.
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