Genesis Research and Development plans to merge with Mariposa Health, an unlisted Australian medical researcher that would own 80 per cent of the enlarged company and provide development projects for treatment of lung disease and the golden staph bacteria.
Under a proposal that has to be approved by Genesis shareholders, the company would issue 200 million new shares to Mariposa, lifting total shares on issue to about 250 million. Based on the last trading price for Genesis of 3.4c, the company would have a market value of $8.5 million.
Genesis would continue as a listed company and look to raise more capital to finance its development programmes, said chief executive Stephen Hall. The size of the share issue to Mariposa, at four-to-one, reflected the relative size of the two companies, he said.
The transaction would take a couple of months to get approvals finalised and a date hasn't yet been set for a shareholder vote, Hall said.
Genesis has struggled as a listed company since going public in 2000, with a market capitalisation of $180 million.
