According to a release issued earlier today, Care Concepts has entered into an agreement with GMI Investment Partners and PET Capital Partners LLC to purchase 48.3% of the non-voting common stock in General Media.
The purchase would clear all of now-bankrupt General Media’s debt.
As part of the deal, General Media will be renamed Penthouse Media Group Inc., and Florida financier Marc H. Bell, leader of the investors in PET Capital Partners LLC, will assume day-to-day operations of Penthouse Magazine.
Last month, Bell won a game of financial tug-of-war with Mexican millionaire Luis Enrique Fernando Molina over the magazine after Molina failed to come up with $60 million to purchase General Media’s debt and a New York bankruptcy judge approved Bell’s reorganization plan.
“Marc Bell Capital Partners is a well-known and respected investment firm,” said Gary Spaniak Jr., president of Care Concepts. “The firm partners have substantial experience in publishing, the Internet and with the capital markets. We believe that Mr. Bell will generate substantial value in connection with Care Concepts investment in reorganized General Media.”
Today’s announcement heralded a 67 percent fall in Care Concepts’ stock since the market opened, dropping from $4.21 to $1.17 at deadline.
According to the company’s SEC filings, Care Concepts’ book value per share, the company’s total assets divided by the amount of stock, is roughly $.47.
The filings also state that the company has had a net loss every year since 2002.
Care Concepts suspended its acquisition of iBill from Penthouse International Inc. late last week after the American Stock Exchange halted trading on its stock pending a hearing regarding the several stock listing eligibility issues stemming from its interaction with Penthouse.
Care Concepts had originally planned to purchase iBill for roughly $55 million from Penthouse in an all-stock transaction.
Yesterday, Care Concepts announced it had signed a letter of intent to purchase Best Candy and Tobacco for $12 million, payable in 2 million shares of Care Concepts stock. The acquisition is supposed to close within 30 days.