WoWo Ltd. (WOWO), a Chinese e-commerce platform, is trading more than 7% lower on Friday after the company said it has agreed to buy Join Me Group (HK) Investment in a cash and stock deal to create an online platform in the Chinese food industry.
The company after the combination will be renamed JM WOWO and will be headquartered in Hong Kong.
WoWo has agreed to issue 741,422,780 ordinary shares and pay $30 million in cash to acquire all the issued and outstanding shares of JMU. In addition, WoWo will also issue 72,000,000 ordinary shares to its chairman and CEO Maodong Xu at a purchase price of the equivalent of $10 per ADS, for a total purchase price of $40 million.
The current shareholders of JMU will hold 50% of all the issued and outstanding shares of JM WOWO. Wowo stock last traded at $11.12, towards the high of its 52-week range of $8.00 – $13.00.
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