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Thursday, 26 August 2021

A family feud brewing?

Speed Medical speedily backs away from Prime Speed acquisition faster than Speedy Gonzales: Speed Medical (SPMD) will not go through with acquiring an additional 70% stake in its “sister” company Prime Speed Medical, saying in a bourse filing (pdf) today that it was “content with its current 30% stake.” SPMD had been looking to acquire the shares of Prime Speed’s three leading shareholders — Prime Egypt Group chairman Tamer Waguih and Prime Speed Medical board members Ayman Sabry and Mahmoud Farrag — in a transaction that would have seen it own 100% of Prime Speed.

On today’s episode of Family Feud: Minutes of SPMD’s board of directors published in the filing listed out a series of grievances to explain why the company will not be going through with the acquisition. As SPMD tells it, Prime Speed’s owners were a bit pushy, trying to get the sale moving “in an exaggerated way that goes beyond normal commercial transactions.” This got alarms ringing over at SPMD, who claim to have become suspicious of Prime Speed’s intentions (the majority shareholders were looking for a share swap agreement) as regarded SPMD’s shares once they got transferred over.

The list goes on: The board of SPMD also cited Prime Medical’s alleged inability to achieve sales targets on its covid-19 air purifier, alleged failure to launch projects other than their drive-through tests, and alleged lack of “ideas and direction” for the post-covid era. The increased competition from firms providing testing as well as SPMD’s positive cashflow made the acquisition unnecessary, the filing claims.

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