KUALA LUMPUR (March 4): Healthcare industry supply chain management specialist Hong Seng Consolidated Bhd has scrapped its plan to acquire a 51% stake in health technologies provider Pow Pocket Sdn Bhd.

According to the group's bourse filing on Friday (March 4), Hong Seng and Pow Pocket's major shareholder Russell Walter Boyd inked a letter of termination on Friday, whereby the parties mutually agreed to terminate their prior heads of agreement (HoA).

Hong Seng said this was because the parties were unable to reach a consensus pertaining to the purchase consideration for the proposed acquisition of the 51% stake in Pow Pocket.

Pow Pocket is a Malaysian company with its principal business in investment holdings for financial services and health technologies-related business activities.

It was reported on Oct 8 last year that Hong Seng's unit HS Bio Sdn Bhd had entered into an HoA with Russell for the proposed acquisition for RM200 million, to expand its healthcare business.

Subsequently, on Dec 7, 2021, the parties mutually agreed to extend the exclusivity period of the HoA for a further three months to March 8, 2022, after HS Bio had yet to complete its due diligence on Pow Pocket.

With the deal falling flat now following the mutual termination, Hong Seng said neither party shall have any further claim against the other for costs, damages or compensation as a result of the termination.

"The parties hereby release the other from the due performance and observance of all its obligations and covenants under the HoA.

"The mutual termination is not expected to have any material effect on the company's earnings, net assets and gearing for the financial year ending Sept 30, 2022," it added.

Hong Seng's shares closed two sen or 0.65% higher at RM3.11, giving the group a market capitalisation of RM7.94 billion.