Why are Microba Life Sciences’ (ASX:MAP) shares up 68%?

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 Why are Microba Life Sciences’ (ASX:MAP) shares up 68%?
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Highlights:

  • Microba’s shares shot up by 68.18% on Tuesday (29 November 2022) to trade at AU$0.37 apiece.
  • The company shared that Sonic Healthcare has bought 19.99% stake in the company for the consideration of AU$17.8 million.

The share price of Microba Life Sciences Limited (ASX:MAP) skyrocketed by a whopping 68.18% on Tuesday (29 November 2022) after the company shared that Sonic Healthcare Limited (ASX:SHL) has acquired a 19.99% strategic stake in the company for AU$17.8 million. In addition to this, Sonic is looking for shareholders’ approval to buy options for a 5% additional equity position.

The company also informed the market that Sonic and Microba have agreed on initial binding terms for a strategic alliance to offer microbiome testing technology of Microba in the United States, Switzerland, Belgium, United Kingdom, Germany, New Zealand, and Australia.

At 1:44 PM AEDT, Microba’s shares were spotted trading 68.18% higher at AU$0.37 per share with a market capitalisation of AU$60.35 million. With this, in one year, the share price has increased by 5.71%, and in six months, it has grown by 23.33%. The monthly gain is 105.56%.

About the acquisition of a strategic stake by Sonic in Microba

Under the equity subscription agreement, Sonic has acquired a 19.99% stake in Microba via the issue of new ordinary shares at AU$0.26 apiece of the issue price. With this transaction, AU$17.8 of new capital has been raised by Microba.

Moreover, Sonic seeks to buy unlisted options at an exercisable price of 33 cents per share, expiring in 18 months. These unlisted options represent 5% of the issued share capital and will raise AU$7.5 million in new capital for the company.

With the completion of this transaction, the Pro-forma cash balance of Microba as of 30 September 2022 will be AU$43.8 billion. The balance sheet would allow the organisation to advance its microbiome therapeutics, testing into the hands of patients and clinicians globally and supporting global expansion.

Strategic relationship between Microba and Sonic, details here

Sonic and Microba have entered into an agreement under which Sonic and its subsidiary companies would distribute microbiome testing products to its customers, specialists, and general practitioners for one year. The agreement would commence on 31 January 2023.

On this, Microba said,

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