Presto deal collapses as Quickflix signs agreement to stream Chinese content

Quickflix PrestoStruggling streaming player Quickflix (ASX: QFX) has told the ASX that it has been forced to abort its deal to become a reseller of rival Presto’s service and instead chosen to sign a deal with an unnamed Shanghai-based film and television company.

In a market update the company announced late last night that the much touted Presto deal, which would have helped the struggling company massively expand its content offering, had to be terminated as it was unable to meet the conditions in the Foxtel Presto Reseller Agreement.

Instead Quickflix will enter into a deal with the unnamed Chinese language film and TV company where it will “acquire the Shanghai-based company for a consideration to be negotiated upon completion of further due diligence.”

Late last week, Quickflix asked the ASX to suspend trading on the company announcing it was in the midst of talks with an international buyer and then asked for a further extension on Monday.

Quickflix tableThe suspension came at the same time as Quickflix released new financial results which shows the company was reporting double digit declines quarterly and year-on-year subscriber numbers, despite a massive surge in consumer awareness, and had lost $1.096m last quarter and now had only $913,000 in cash on hand.

Today’s ASX announcement emphasises how the Chinese content company is “profitable and generates free cash-flow. Consolidation with Quickflix would result in the combined entity having a significantly improved financial outlook and ability to access further capital for growth.”

The Quickflix Presto deal inked in May, and also this deal appear to both been carefully constructed to avoid triggering Stan’s warrants.

Mumbrella first tipped that an Asian niche player could seek to do a deal with Quickflix and it is now thought that investors in the company may look to secure Stan’s strategic stake in the company which entitles it to a $10.5m payment in the event of sale. The company currently has a market capitalisation of $4.41m.

Asked about the collapse of the Presto deal a spokesman for the company said: “The proposed agreement with Quickflix was subject to a series of commercial requirements. We are disappointed that they were unable to meet these requirements to enable them to become a reseller of Presto.”

Nic Christensen


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