Struggling Australian video streaming company Quickflix has entered into a surprise agreement to takeover an unnamed Chinese language film and television production company, subject to due diligence and regulatory approval.
It follows the surprise reneging on a reseller deal with rival streaming service Presto, owned by Foxtel, which was to give Quickflix customers access to the Presto catalogue.
In a statement, Quickflix said it would join forces with the Shanghai-based company to distribute Chinese language film and television content in China and internationally.
As well as producing original Chinese language content, the takeover target participates in co-productions in China and abroad, including with an unnamed US studio, Quickflix said.
A price for the takeover target is yet to be negotiated, subject to further due diligence. Quickflix said it expected to be in a position to further update the market "on or before August 20".
"Consolidation with Quickflix would result in the combined entity having a significantly improved financial outlook and ability to access further capital for growth," the company said.
Quickflix's latest quarterly results, released last week, showed the service had 107,696 paying subscribers, losing nearly 16,000 subscribers in the quarter. The company does not break down figures for its streaming and DVD customers.
Rival streaming service Netflix, which launched in Australia in March, is estimated to have about 1 million customers.
Quickflix shares have been in a trading halt since last Thursday pending the takeover announcement.
They last traded at 0.002¢ with a market cap of $2.3 million.
