JIA YAO HLDGS (01626.HK): Proposed Acquisition of 80% of Target Company for HKD 430.5 Million, Settled by Consideration Shares at HKD 21.00 Per Share
NewTimeSpace News: On 12 August 2026 (after trading hours of the Stock Exchange), Jia Yao Holdings Limited (stock code: 01626) announced that the Company (as purchaser), the vendor and the guarantor entered into a sale and purchase agreement, pursuant to which the Company conditionally agreed to acquire the sale shares, representing 80% of the total issued shares of the target company, at a maximum consideration of HKD 430,500,000, to be satisfied by allotting and issuing consideration shares (credited as fully paid) to the vendor at an issue price of HKD 21.00 per share under the general mandate.
According to the announcement, the sale shares are 80 shares of the target company with a par value of USD 1.00 each, representing 80% of the total issued shares of the target company. The maximum number of consideration shares to be allotted and issued is 20,500,000, representing approximately 3.42% of the Company's existing issued share capital as of the date of the announcement and approximately 3.30% of the enlarged issued share capital. The consideration was determined after arm's length negotiation, taking into account the business development and future prospects of the target group, the valuation of approximately HKD 432,000,000 for the 80% equity interest of the target group as of 30 June 2026, the profit guarantee and the reasons for and benefits of the acquisition.
In respect of the profit guarantee, the vendor and the guarantor have warranted that the consolidated net profit after tax of the target group for the year ended 31 December 2026 will be no less than HKD 50,000,000; if the actual profit falls below such guaranteed amount, the vendor is only entitled to receive the number of consideration shares corresponding to the achieved profit guarantee ratio, and if the target group records a net loss after tax, the vendor is not entitled to receive any consideration shares. The issue price of HKD 21.00 per share represents a discount of approximately 17.90% to the closing price of HKD 25.58 per share on the date of the sale and purchase agreement, and approximately 18.60% to the average closing price of HKD 25.80 per share for the five consecutive trading days immediately preceding the date of the agreement.
The target group is principally engaged in AI-driven internet game development and publishing, as well as development, consulting and service provision related to enterprise-level AI application technologies. Upon completion, the target company will be held as to 80% by the Company, 16% by the vendor and 4% by Ms. Chen Jing, and will become a subsidiary of the Company, with its financial results consolidated into the Group's results. As the highest applicable percentage ratio of the acquisition exceeds 5% but is less than 25%, the acquisition constitutes a discloseable transaction of the Company and is subject to the notification and announcement requirements. Shareholders and potential investors should note that completion is conditional upon the satisfaction of the conditions precedent under the sale and purchase agreement and may not proceed.
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