The ASX-listed retailing sector company Vita Group (ASX:VTG) shared that it has entered into a Share Sale Agreement (SSA) for the sale of its Retail Information and Communication Technology business to Telstra Corporation Limited (ASX:TLS).
The cash consideration of the SSA is worth AU$110 million.
About the Share Sale Agreement:
The announcement stated that according to a part of the Proposed Transaction, Telstra will take over the employment relationship with all store team members and field leaders, the Sprout team, and the majority of supporting teams and team members of VTG. However, all of them will continue to be employed under the Vita People entity, which will be owned by Telstra.
VTG also shared that after completing the proposed transaction, the Company would expect to distribute a majority of the proceeds, less specific transaction, wind-up, and other transition costs, to shareholders via a fully franked Special Dividend.
The fully franked dividend would be worth approximately AU$65 million- AU$75 million (payable in two payments), representing AU$0.39 to AU$0.45 per share, plus franking credits of up to approximately AU$0.17 to AU$0.19 per share.
Vita further intends to utilise the remaining portion of proceeds to fund the further growth of the Artisan Aesthetic Clinics business. The remaining portion of the proceeds has currently summed up to be approximately AU$35 million.
Vita Group Limited is an Australia-based company that is closely associated with retail business and consumer discretionary space. The Company aims to offer its customers an improved way of life through expert consultation and value creation across different brands.
Meanwhile, on the ASX, the VTG stock traded last at AU$0.925 per share while TLS traded at AU$3.980 per share.
Vita has informed that it has enjoyed a long-term strategic relationship with Telstra for the past 26 years. The fact that VTG has reached this agreement with Telstra has shown certainty of the upcoming steps and spread positive value for both parties.