LONDON (Alliance News) - ProPhotonix Ltd saw its shares rise early Tuesday after it welcomed 600 Group PLC as a major shareholder and said it was looking forward to collaborating with it, and said its shares had been bought at over double their recent trading price.
600 Group said Monday it had bought a 26.3% stake in ProPhotonix from other shareholders in return for 600 Group shares, a deal that will make it the US-based laser diodes and LED lighting distributor's biggest shareholder. "This should be construed as a strategic investment in a company with interesting business activities and improving prospects," said 600 Group Chairman Paul Dupee at the time.
"The board is pleased to see this level of interest in the company's equity at what represents a substantial premium to market price. The company has taken significant steps to reduce costs over the past 16 months, while increasing revenue, with considerable progress achieved towards positive EBITDA and cash flow," ProPhotonix President and Chief Executive Tim Losik said in a statement Tuesday.
"The directors of ProPhotonix look forward to a positive and constructive collaboration with the 600 Group, which is expected to become the company's largest shareholder on 8 August 2014," he added.
ProPhotonix said the 600 Group deal implied a price of 5.0 pence per ProPhotonix share, more than double the 22.375 pence closing price in August 1.
ProPhotonix shares initially fell heavily Monday in the wake of the 600 Group release, but then rallied. The stock was up 70.5% at 4.05 pence Tuesday morning, the biggest increase on the AIM All-Share index. 600 Group shares were down 2.4% at 20.50 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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