Local telco StarHub said on Tuesday it will invest S$18 million to acquire a 9.05 per cent stake in Catalist-listed film and TV content producer mm2 Asia.
Some 44 million new mm2 shares will be placed to StarHub at S$0.41 each, a 19 per cent discount to the volume weighted average price of S$0.5077 for trades done on Tuesday.
StarHub CEO Tan Tong Hai said in a statement that the stake purchase was a strategic move to allow the firm to expand its pay-TV offerings.
StarHub can also tap mm2's regional presence to market and distribute the telco's localised content beyond Singapore, he said.
mm2 said the placement is to increase resources available to the company to improve its cash flow and to pursue acquisition opportunities.
StarHub has been partnering mm2 Asia since 2012 by investing in the Ah Boys To Men and Lion Men movie series co-produced by mm2 Asia.
The two companies are currently collaborating on Hear Me Sing, an online Chinese singing competition to be launched in April. mm2 will produce the competition and StarHub will present it.
Mr Tan added that StarHub can tap mm2's cineplex business to showcase its content, and also gain access to top-rated concerts and artistes.
mm2 was founded in 2008 and incorporated in 2014. It is headquartered in Singapore, where it gets most of its revenue. It also has representative offices in China, Hong Kong, Malaysia and Taiwan.
Since 2008, it has co-produced or distributed over 50 films.
The company made S$4 million in net profit from S$12.7 million in revenue for the six months ended Sept 30, 2015.
Last month, mm2 Asia said it will acquire a 51 per cent stake in event and concert producer, UnUsUaL group of companies, for up to S$26 million.
mm2 closed at 52 cents, up 2 cents, before the latest announcement. StarHub closed down 2 cents to S$3.32.
This article was first published on March 23, 2016.
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