Fragrant Prosperity Holdings Limited (LON:FPP) said it has signed a letter of intent (LOI) regarding a potential reverse takeover with CiiTECH Ltd, a British-Israeli cannabis wellness firm.
Under the deal, the company said it has conditionally agreed to acquire CiiTECH for £17.5mln through the issue of shares in the group at a price of 5.25p each, a 36.4% premium to its closing price on Friday.
As part of the tie-up, Fragrant said completion of the deal is conditional upon an agreement on the composition of its new board and the renaming of FPP as CiiTECH Group in addition to satisfactory financial, legal and commercial due diligence.
In a separate announcement, the company said its shares have been suspended on the LSE pending the publication of a prospectus and an application to have its enlarged share capital listed on the standard segment of the main market.