19th Mar 2019 11:53
LONDON (Alliance News) - Stranger Holdings PLC said Tuesday it was seeking legal advise amid concern a potential acquisition target may have solvency issues after it failed to engage fully with takeover talks.
Meanwhile, the cash shell has uncovered a new potential takeover target.
Previously, Stranger had approach Alchemy Utilities Ltd over the possibility for a reverse takeover. Since then, Alchemy has refused to provide audited accounts to Stranger as requested for "some months" in order to progress the deal.
Consequently, Stranger believes the deal may have been "deliberately sabotaged" by Alchemy.
Stranger is currently in talks with its legal advisers about action to be taken to remedy the GBP300,000 loan handed to Alchemy as well as the GBP450,000 in costs associated with the reverse takeover process already undertaken.
"Stranger's advisers are concerned that the withholding of audited accounts may be due to solvency issues of Alchemy," Stranger explained in a statement. The firm added that the management of Alchemy "may have fraudulently misrepresented the financial status of Alchemy" throughout the takeover process to date.
"This has been a long and arduous process, so naturally we are disappointed in the Alchemy team and will be seeking the recovery of monies lent to and incurred from Alchemy together with substantial damages," Stranger Chief Executive Officer Charles Tatnall said.
"This is frustrating; however, we are pleased to report that we are in discussions with the representatives of an alternative and attractive acquisition and will update the market in the near future," Tatnall added.
Shares in Stranger are suspended from trading in London, having last traded at 1.38 pence.
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