Media Shoppe Bhd (KLSE:TMS) entered into a heads of agreement to acquire 66% stake in Open Adventure Sdn Bhd from Chan Chau Loong and Liaw Yit Sun for MYR 1.8 million in stock on January 19, 2012. As on May 11, 2012, Media Shoppe Bhd entered into a conditional share sale agreement to acquire Open Adventure Sdn Bhd from Chan Chau Loong and Liaw Yit Sun. As part of the transaction, Media Shoppe Bhd is issuing 19.8 million shares to the vendors. The heads of agreement is valid for 6 months and the validity term may be extended with mutual consent from both Media Shoppe and Open Adventure. Media Shoppe will acquire 33% stake each from Chan Chau Loong and Liaw Yit Sun.

As per the terms of the agreement, Chan Chau Loong and Liaw Yit Sun will enter into a profit guarantee agreement to guarantee to Media Shoppe that Open Adventure shall have an aggregate net profit after tax of not less than the aggregate MYR 1.8 million for the financial years ended December 31, 2012, December 31, 2013 and December 31, 2014. For the purposes of this profit guarantee agreement, Chan Chau Loong and Liaw Yit Sun agree that 6 million Media Shoppe shares entitled to Chan Chau Loong shall be placed with the stakeholder for the security shares until satisfaction of the profit guarantee for the financial years ended December 31, 2014 and 6 million Media Shoppe shares entitled to Liaw Yit Sun shall be placed with the stakeholder for the security shares until satisfaction of the profit guarantee for the financial years ended December 31, 2014. In the event that the audited net profit after tax of Open Adventure for each of the guaranteed financial years is less than the profit guarantee, Chan Chau Loong and Liaw Yit Sun irrevocably and unconditionally undertake that they shall compensate Media Shoppe for the profit shortfall by way of cash payment within 30 days from the date of receipt of the certificate to be issued by the external auditors of Open Adventure for each and every financial years and in the event that the audited net profit after tax of Open Adventure for each of the guaranteed financial years exceed the profit guarantee, Media Shoppe, Chan Chau Loong and Liaw Yit Sun agree that the surplus of audited net profit after tax after deduction of the profit guarantee shall not be carried forward to the following guaranteed financial years.

There are no liabilities including contingent liabilities and guarantees to be assumed by Media Shoppe arising from the acquisition. Open Adventure reported revenues of MYR 1.14 million, profit before tax of MYR 0.10 million and profit after tax of MYR 0.09 million for the period from January 27, 2010 to March 31, 2011. Open Adventure reported shareholders' equity of MYR 0.18 million as of December 31, 2011. The transaction is subject to certain conditions as, the approval of the Board and shareholders of Media Shoppe Bhd, the approvals of the relevant authorities having been obtained, including but not limited to the approval from Bursa Securities for the listing of and quotation for the consideration shares issued as form of consideration, on the ACE Market of Bursa Securities, Media Shoppe Bhd being satisfied with the results of its due diligence investigation and such other consents or approvals as may be required of a relevant third party. The acquisition is also conditional upon proposed increase in authorised share capital of Media Shoppe and proposed amendment in the memorandum of association of Media Shoppe.
As on August 10, 2012, Media Shoppe and the Open Adventure's vendors mutually agreed to extend the Open Adventure cut-off date for a further period of three months from August 11, 2012 to November 10, 2012, in view that the conditions precedent were not yet fulfilled as at August 10, 2012. As on October 16, 2012, Board of Directors of THE MEDIA SHOPPE approved the listing of shares to be issued as consideration. The agreement may be terminated, if any of the conditions are not satisfied within 3 months from May 11, 2012. As on October 23, 2012, the cutoff date of the transaction has been extended from November 11, 2012 to January 10, 2013. As of November 6, 2012, Board of Directors of THE MEDIA SHOPPE recommended the shareholders to approve the resolution.

The Board of Directors of Media Shoppe's shareholders' meeting will be held on December 3, 2012. The acquisitions may contribute positively to the future earnings of the enlarged Media Shoppe for the financial years ended December 31, 2012. Hong Leong Investment Bank Berhad acted as financial advisor and AHL Chartered Accountants acted as accountant for Media Shoppe Bhd.

Media Shoppe Bhd (KLSE:TMS) completed the acquisition of 66% stake in Open Adventure Sdn Bhd from Chan Chau Loong and Liaw Yit Sun on January 8, 2013.