Stock market shell Topspin Medical Inc. (TASE:TOPMD), once the developer of a miniature MRI imaging system, today notified the Tel Aviv Stock Exchange (TASE) that Anavid Industries Ltd. has cancelled the sale of Kiryat Anavim Silicone Technologies Ltd. (KAST) to Topspin. Anavid claims that the stipulated deadline for closing the sale has expired.
Topspin's share fell 3.7% today to NIS 2.70, giving a market cap of NIS 20.5 million.
Topspin had earlier reported delays in closing the deal, and that it and controlling shareholder Ascher Shmulewitz were seeking a structure to complete it. The company said at the time that it was seeking alternative sources of capital. In the previous announcement, it attributed delays to the results of due diligence.
The announcements imply that the due diligence found that KAST's operating costs were higher than originally believed, and that Topspin lacked the financing to make the company profitable. Topspin had NIS 2.3 million in cash at the end of June.
Although Anavid explicitly notified Topspin that it was withdrawing the offer, sources close to Topspin today claimed that negotiations were still being pursued, and that it had not yet given up on the deal.
Published by Globes [online], Israel business news - www.globes-online.com - on October 28, 2009
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