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- Roto-Gro International (RGI) has pulled the pin on a majority acquisition of 420 Inc., citing extensive associated costs and transactional delays
- The company first announced it would acquire a controlling interest in 420 Inc, or Medicinal Compassion Canni Farms as it was known at the time, in October 2019 through a mixture of cash and shares
- Nearly 18 months later, Roto-Gro has concluded the buy would constitute a change in the nature of its business activities and therefore cause further delays and costs associated with maintaining ASX listing rules
- The company has not disclosed the implied details of the change or explicitly how the acquisition would cause such a change
- Roto-Gro’s share price has taken a 14.8 per cent hit following the announcement to trade at 4.6 cents
Roto-Gro International (RGI) has pulled the pin on a majority acquisition of 420 Inc., citing extensive associated costs and transactional delays.
The withdrawal comes nearly 18 months after Roto-Gro first announced the acquisition for 420 Inc, which was known as Medicinal Compassion Canni Farms at the time.
Roto-Gro was set to acquire 51 per cent of the issued common shares in the capital stock of 420 Inc as per an announcement in October 2019 through $110,000 in cash and $7.5 million worth of RotoGro shares.
RGI today advised however that the proposed buy would constitute a change in the nature of the company’s activities and therefore cause “further transactional delays and significant costs”, ultimately amounting to a decision to pull out from the deal.
The company has not disclosed the implied details of the change or explicitly how the acquisition would cause such a change.
More specifically, Roto-Gro would be required under ASX listing rule 11.1.3 to re-comply with the requirements of chapters one and two of the listing rules before it may complete the acquisition, which would prevent completing the 420 acquisition on a “timely basis.”
The company says it will continue to evaluate commercial opportunities in line with its business strategy.
Roto-Gro’s share price has taken a 14.8 per cent hit following the announcement, trading at 4.6 cents at 12:09 pm AEST.
