KUALA LUMPUR (Sept 3): DC Healthcare Holdings Bhd (KL:DCHCARE) has mutually terminated its agreement to acquire aesthetic medical clinic operator I Bella Sdn Bhd for RM70 million, after the parties were unable to agree on the revised terms following a decline in DC Healthcare's share price.
In the initial agreement with vendors Then Yen Tsing and Arrow Peak Sdn Bhd, DC Healthcare had proposed to pay RM35 million cash for the acquisition, while the other RM35 million was to be satisfied via an issuance of 60.34 million new shares at 58 sen apiece.
However, since the proposed acquisition was announced on Nov 21, 2023, shares in DC Healthcare have fallen 68% from 50 sen to 16 sen as of Monday.
Following termination of the agreement, DC Healthcare has decided to abort the proposed one-for-four bonus issue of warrants, "after assessing the current market conditions and the performance of DC Healthcare’s shares," the group said in a filing with Bursa Malaysia on Tuesday.
It added that the termination will have no material impact on its issued share capital, earnings and net assets.
DC Healthcare made its debut on the ACE Market of Bursa Malaysia in July 2023, with an initial public offering price of 25 sen per share, raising RM49.81 million. On its debut trading day, the counter closed up 80% at 45 sen.
After hovering between 45 sen and 53 sen for about four months, the counter started falling after November 2023, when the proposed acquisition of I Bella was announced.
On Tuesday, DC Healthcare closed up 0.5 sen or 3.03% to 17 sen, for a market capitalisation of RM164.39 million.