Adultshop (ASX:ASC) proposes brothel acquisition

Shares in online storefront (ASX:ASC) have surged 30% after the company announced a proposed a merger with bordello operator Blackfeather Limited.

Under the terms of the proposed merger, AdultShop's share capital would be consolidated on a 1:8 basis. AdultShop would then acquire 100% of Blackfeather's Sydney brothel, Stiletto, for $20 million, then issue $10 million in new shares to sophisticated investment.

After the consolidation, AdultShop would launch a buyback offer for all shares issued, excluding those issued to Blackfeather and under the $10 million placement, at $0.21 per share.

The agreement is subject to conditions including shareholder and regulatory approvals.

ASC shares are currently trading at $0.017.