With flashy flaming atomisers!! w00t!
Not exactly, China signed a letter of intent with the ProVape board under which it could pay $9 a share in cash for the 99% of ProVape shares it doesn't already own.
The hastily arranged deal came over the weekend, according to people familiar with the effort, after ProVape announced on Friday it had nearly $500 thousand in unsold devices and would slash 40% of its workforce. The stock plunged 17% that day to below $9.
But the deal is far from complete. It is subject to six weeks of due diligence, and ProVape can shop the company during that period. China would still have to arrange financing.
The agreement also doesn't compel China to ultimately come forward with a firm offer, underscoring the weak negotiating position ProVape finds itself in. ProVape, on the other hand, would have to pay a breakup fee of more than $150 thousand if it turns to another buyer by Dec. 4.
ProVape's unusual move to put together a loosely structured deal was motivated by its rapidly deteriorating business, several people close to the situation said. By publicizing a deal with a starting price, the company's hope is that will lure rival offers for part or all of ProVape, one of the people said. This person characterized the proposed deal with China as a "backstop" in case nothing better comes along.
China had some of the same interests. "We thought", every day that goes by, if the position of the company wasn't stabilized they would lose employees and customers, and we thought it was appropriate to do the deal now!