Amigo Holdings PLC (LSE:AMGO) shares have been suspended after it agreed to explore a potential deal to buy a quartet of technology startups, including an online music streaming service.
As Amigo continues to wind down its former lending business, management is in talks with AIM-listed Craven House Capital PLC (AIM:CRV) and two of its investee companies under a newly signed exclusivity agreement.
Craven said it would be structured as a reverse takeover.
The former guarantor lender, which earlier in the summer failed in its last-ditch attempts to raise rescue funds and said last month that it expects to be insolvent within months, said the board has concluded that securing new finance is "effectively not possible".
So, as part of the deal being discussed with Craven House, where the exclusivity period ends on 14 December, Amigo would acquire music streaming service ONEBas.com; digital magazine platform Magazinos; film streaming service TV Zinos, and payments provider Payzinos in return for new shares in Amigo.
A cash subscription of at least £5 million, from a further new share issue, is also proposed to provide funds for the potentially enlarged group.
If the deal goes ahead, Amigo noted that existing shareholders would be significantly diluted, having already seen the shares plummet more than 99% since the start of 2020.
Amigo chief executive Danny Malone said: "Over the past few months we have remained open to investment opportunities that would allow the business to restart, but have always said the likelihood of success to be very low. Unfortunately, that has been the case."
"The proposed transactions offer a solution that, if complete, would deliver some small value to shareholders which wouldn't be possible otherwise."
Craven House owns 29.9% of Garimon, which owns Stormfjord (of which Craven owns 26.2%), which owns OneBas, Magazinos and TV Zinos.
Craven also owns 29.9% of Honeydog, which according to the last Craven accounts, is the 25% owner of an entity that owns the licence to manufacture and distribute the chemotherapy drug, Temodex, which is used in the treatment of brain tumours.
Cato Crogh (Photo: Instagram/catocrogh)
Stormfjord is owned by Cato Crogh, whose social media profiles say he is the founder of Art-Studio CATO, Magazinos, ONEBas.com, TV Zinos.com and Bio Vitos, as well as being the former owner of a 13-strong restaurant chain.
A post today on Stockholm-based Crogh's Instagram page also says "WE JUST SIGNED AMIGO", with one six days ago saying "JUST SIGNED ON LSE".