Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭) yesterday said it is seeking a settlement with the Securities and Futures Investors Protection Center (SFIPC) over a class-action lawsuit against the company’s withdrawal from its acquisition of XPEC Entertainment Inc (樂陞科技).
The center, which serves as the plaintiff of a class-action on behalf of 5,000 XPEC shareholders, sought unspecified compensation for damages caused by Bai Chi’s cancelation last month of the NT$4.86 billion (US$155 million) deal.
Bai Chi said that it was forced to drop the deal after its major financial supporters decided not to finance the acquisition at the last minute.
“Bai Chi will make every effort to compensate [XPEC] shareholders who participated in the tender offer bid to recover their losses,” the company said in a statement released yesterday. “Bai Chi started an initial negotiation last month with the SFIPC via its lawyers to explore the possibility of a settlement. Bai Chi hopes to settle the case in the short term.”
The Japanese company is negotiating with the SFIPC to reach a substantial settlement, according to the statement. The company is also in talks with potential supporters to get a capital injection, backed by its assets.
XPEC has seen its market value drop by NT$11.46 billion after the tender offer bid collapsed last month. The share price of XPEC on Friday took a nosedive of 69 percent to NT$33.8 on the TPEX, compared with a closing price of NT$105 on May 31.
On May 31, local video game developer XPEC said that the Japanese company launched a tender offer to buy 38 million XPEC shares via private placements for NT$128 per share in cash. The transaction would have boosted Bai Chi chairman Yoshiaki Kashino’s holdings in XPEC to 21.66 percent from 9 percent.
Separately, XPEC on Friday last week said that it planned to sell its non-core assets, including its holdings in honey cake maker E. G-Sain (一之鄉) and coffee shop chain Ikari Coffee (怡客咖啡), to solve its cash-flow problem.
The company said it needs NT$600 million to finance its operation in the short term. XPEC blamed its financial strain on a delayed payment of US$86.59 million for the sales of its subsidiaries.
XPEC so far has received US$3 million, the company told a media briefing on Friday last week. The company agreed to give a grace period and allowed the buyer to make the remaining payments by Oct. 31. The buyer is also allowed to pay in several installments.
Due to the financial problems, XPEC shares are only allowed to be traded in cash from tomorrow, the TPEX said.
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