Update 8:20am: Adds company confirmation.
ContextLogic (NASDAQ:WISH), the parent of discount online retailer Wish, soared 29% after it agreed to sell its assets and liabilities, mainly its Wish ecommerce platform, for $173 million in cash to Singaporean e-commerce company Qoo10.
The purchase price is $6.50 per share, a 44% premium to ConextLogic’s closing price on Friday, according to a statement on Monday.
Following close of the deal. ContextLogic (WISH) would remain the entity that holds the proceeds from the sale as well as $2.7 billion of operating loss carryforwards. The board intends to use the procceds to help monetize its NOLs.
The board also intends to explore the opportunity for a financial sponsor to help realize the value of its tax assets. If the ContextLogic board doesn’t identify opportunities that will allow it to effectively monetize the value of its NOLs to the benefit of shareholders, it intends to promptly return all capital to shareholders.
ContextLogic (WISH) expects to complete the transaction in the second quarter. The transaction is not subject to any financing contingency. As part of the agreement, ContextLogic will begin trading under a new ticker symbol within 30 days of the closing of the transaction.
In order to protect the Company’s ability to use its substantial NOLs in the future, the board has also unanimously adopted a tax benefits preservation plan.
JPMorgan is acting as financial advisor to the Company and Sidley Austin LLP is acting as legal counsel. News of sale was earlier reported by Bloomberg.
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