PINESTONE-NEW (00804) announced that on September 30, 2025, the company (as purchaser) entered into an agreement with the vendor Joint System Limited, whereby the company conditionally agreed to purchase and the vendor conditionally agreed to sell the sale shares (representing the entire issued share capital of the target company Jumbo Company Limited) for a consideration of HK$40 million. The consideration will be satisfied through the issue and allotment of 13.986 million consideration shares at an issue price of HK$2.86 per consideration share.
Upon completion, the target company will become a direct wholly-owned subsidiary of the company, and the financial results of the target group will be consolidated into the group's financial statements. Assuming no change in the company's issued share capital between the announcement date and completion date, the fully-paid consideration shares to be allotted and issued (being 13.986 million new shares) will represent approximately 18.67% of the company's issued share capital as at the announcement date, and approximately 22.96% of the company's enlarged issued share capital following the allotment and issuance of the consideration shares.
While expanding its core business, the group is actively entering the distressed asset disposal market. The group plans to establish a distressed asset disposal auction platform in Asia and is evaluating other development opportunities in this sector to further diversify revenue sources. To strengthen the execution of this strategic direction, the company appointed Mr. Wang Han as executive director on June 2, 2025, to lead the assessment of business opportunities in the distressed asset disposal industry. Mr. Wang previously served as Regional Director for Guangdong at Ali Auction under Taobao (China) Software Co., Ltd. from May 2020 to September 2022, possessing relevant experience in online auction operations and ecosystem development.
The proposed acquisition aligns with the group's established strategy, aiming to accelerate entry into the distressed asset ecosystem by establishing connections with mainland China's distressed asset disposal infrastructure and customer network. Meanwhile, the company plans to establish a distressed asset auction platform in Hong Kong, enabling potential Hong Kong clients (including law firms, banks, and securities companies) to manage and dispose of distressed assets in Hong Kong and mainland China through the group. The group also intends to provide ancillary services in mainland China, such as asset investigation and location services, to support cross-border recovery efforts.
Given the substantial business opportunities in the distressed asset market, the board believes the proposed acquisition will serve as a cornerstone for the group's expansion into the distressed asset disposal business, enabling the group to: accelerate market entry; leverage synergies in customer development and services between Hong Kong and mainland China; diversify revenue sources; and enhance long-term shareholder value.
The directors consider that the terms of the agreement are on normal commercial terms, fair and reasonable, and in the interests of the company and its shareholders as a whole.