Quickflix places shares in trading halt amid rumours it is set to be taken over

QuickflixStruggling Australian streaming service Quickflix has placed its shares in a trading halt today, with the Perth-based company announcing to the market it was in the midst of a potential international “acquisition”.

At the time of the halt the shares in the company, which has struggled since the introduction of US giant Netflix and local rivals Stan and Presto, were trading at 0.2c, giving the company a market capitalisation of $2.3m.

In its statement to the Australian Securities Exchange this morning the company said it was requesting the trading halt “pending release of an update regarding a potential corporate transaction with an international party which may result in an acquisition”.

The company has undergone several rounds of capital raising, which have seen founder Steven Langsford sink more money into the business he created as a mail-delivery DVD service.

Between January and March the company claimed it had grown its paid subscriber base to 123,000, but admitted it was still losing around $800,000 per quarter and was running short of cash.

In May the company also moved to cut its costly content licensing costs by signing on to become a reseller for Foxtel and Seven West Media’s Presto service, while it has recently moved to wind back its distribution deals with studios as it continues to cut costs.

The mention of an “international” party in the release appears to rule out a move by one of the local players while it is unclear what value a company like Netflix would take from a deal, given recent figures show it has a commanding lead in the local market.

Speculation has been rife a niche player could enter the market to target certain demographics, such as the Asian market, with content.

However, any transaction could be complicated by a strategic stake which was bought by Nine Entertainment Co and Fairfax’s joint venture Stan in the company last year, entitling the company to a large payout.

That warrant, acquired for $1m, would see Stan owed $10.5m in the event of “a disposal of substantially all of the Company’s assets, a merger  or takeover, a person other than the shareholder acquiring a voting power of more than 51% in the Company, or any change in the majority of the members of the Board of Directors unless the replacement Directors were nominated by the majority of the Company’s Board.”

The trading halt will be in place until Monday, August 3.

Alex Hayes



Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.