THE Trendlines Group said on Thursday that it will drop its plan for a proposed dual primary listing and securities offer on the Tel Aviv Stock Exchange (TASE) in Israel.

 

In an exchange filing, the Israel-based company said that it made the decision following " further assessment of various factors, including prevailing general economic and capital market conditions which were not favourable to the company" .

 

It added: " Notwithstanding the discontinuation of the proposed TASE listing at this time, the group will continue to assess all avenues and opportunities to support the growth of the group, with the aim of enhancing long-term shareholder value."

 

Trendlines, which is an investor in early-stage companies, had previously announced in April that it was pursuing a dual primary listing in Israel, which it said will be beneficial for the company, and is in the interest of shareholders.

 

Trendlines chief executives previously told The Business Times in an interview that there is greater familiarity in Israel than Singapore 

 

The company had also said in April that it expected institutional investors to participate in the proposed securities offer that was to take place in conjunction with the proposed TASE listing.

 

Last month, Sarine Technologies, another Israel-based company listed in Singapore, said that its application for a dual listing on the TASE had been approved. Trading of its shares on the TASE started on July 5.

 

In Thursday' s announcement, Trendlines also reaffirmed that the acquisition of a portfolio company, previously announced in April, remains current. It noted that the parties are still in talks on the signing of a definitive agreement in due course.

SHARES of The Trendlines Group jumped to a 10-month high on Tuesday after the company said it received a non-binding letter of intent (LOI) for the acquisition of a portfolio company by an unnamed public corporation.

 

The counter hit an intraday high of 12.2 Singapore cents on Tuesday, up 24.5 per cent or 2.4 cents as at 1.46pm. The last time the startup incubator' s shares closed near this level was on May 20, 2020.

 

Trendlines closed at 11.3 Singapore cents on Tuesday, up 15.3 per cent or 1.5 cents, with 101.4 million shares changing hands.

 

If a definitive agreement is signed and the acquisition is completed, Trendlines expects the deal to have a material positive impact on its net tangible assets per share and earnings per share for the financial year ending Dec 31, 2021.

 

Based on the LOI, Trendlines' minimum share of the sale proceeds to be received in cash is estimated to be about S$19 million.

 

However, the group said there is " no assurance" that the LOI will be executed, or that the sale of its portfolio company would take place. The Catalist-listed company will make a subsequent announcement in the event that the LOI or a definitive agreement is not entered into.

 

The non-binding LOI comes one day after Trendlines announced plans for a dual primary listing on Israel' s Tel-Aviv Stock Exchange (TASE). If completed, this will be the first dual primary listing and offering between the Singapore and TASE markets, the company said in a bourse filing on Monday.

 

Trendlines, which is an Israeli incorporated company, had on March 31 submitted an application to the Israeli Securities Authority to publish a prospectus on TASE. The startup incubator is also in the middle of consulting with SGX on the proposed TASE listing and securities offer.

 

Steve Rhodes and Todd Dollinger, who share the chairman and chief executive roles of the company, said Tel-Aviv investors, through recent technology company IPOs, have indicated great interest in tech listings and early-stage investment platforms like Trendlines.

 

The company' s IPO advisers believe the market situation is positive, as indicated by recent TASE activity. In recent months, there have been more than 40 IPOs on the Israeli bourse, Trendlines said separately on Monday.

 

As the stock markets in Singapore and Israel attract different investors, Trendlines said the dual listings will provide the company with access to two different equity markets.

 

Mr Rhodes and Mr Dollinger noted that Israeli investors know more about the TASE and Israeli companies than they do about Singapore-listed companies.

 

" This, alone, represents substantial opportunity to have greater visibility and easier trading for them, on an Israeli schedule," Mr Rhodes and Mr Dollinger said.

 

The duo expect the IPO to be at least 70 per cent subscribed by institutional investors as Israeli institutions " generally have very limited investments outside of Israel" . Investments outside of Israel are " mostly on the US markets" , they added.

 

Mr Rhodes and Mr Dollinger said that many US investors invest in TASE-traded shares and that it is very difficult for Americans to trade in Singapore. As such, the listing would give the company a large investor base.

 

The proposal for the dual-listing is subject to approvals from TASE, ISA, SGX and Trendlines' existing shareholders. The completion of the listing is also subject to market conditions.