Quickflix soars on Nine taking stake
Quickflix has confirmed that Nine Entertainment has taken a minority stake in the company through a deal with US television giant Home Box Office.
The movie rental provider said Nine had reached an agreement to acquire all of HBO's redeemable convertible preference shares.
The shares can be converted into an 8 per cent stake in Quickflix.
The Australian Financial Review reported that Nine paid almost $1 million for the shares.
Quickflix shares closed up 0.4 cents, or 40 per cent, to 1.4 cents.
HBO, the maker of programs including Game of Thrones and True Detective, spent $10 million on its investment in Quickflix in 2012, soon after signing a licensing agreement with the streaming company.
Quickflix's market value has plunged since early 2012, with its shares falling from 13.8 cents to one cent prior to Monday's announcement.
Nine said its investment in Quickflix was small and opportunistic, which it believes offers an attractive risk-reward profile.
The preference shares now held by Nine are not quoted on the share market, but can be converted to normal shares at a discount rate.
Quickflix offers streaming of movies and TV shows, from networks including HBO, the BBC and ABC, to laptops, mobile devices and game consoles.
Its customer numbers fell during 2012 and 2013, but improved in the first three months of 2014 to almost 120,000.
Quickflix made a loss of $6.4 million in 2012/13, and a loss of $4.2 million in the first half of 2013/14.
With AAP
