Calgary-based oil explorer Primary Petroleum (
TSX:V.PIE,
Stock Forum) has pulled a 180-degree switch and opted to end its involvement in the oil and gas business so that it can merge with private social media company, Keek.
A news release Tuesday morning announced the two companies have entered into an arm’s length letter of intent that involves Primary taking all 175 million outstanding shares of Keek in return for shares in Primary on a 1:1 basis.
Mike Marrandino, President & CEO of Primary said of the deal in a news release, “While clearly a possible shift in the direction of the company, Primary is pleased to have found this unique opportunity and to enter into the LOI process with Keek.”
He added, “Keek's global brand, established social video platform and a community in excess of 60 million users provides Primary with an incredible opportunity to enter the exciting social media space.”
Keek is a website that allows people to post videos up to 36 seconds in length for other users, much like competing social video company hit Vine, which allows users to post six second videos. The company has previously raised $30 million in private capital.
The move would be accounted for as a reverse takeover of Primary by Keek. Primary would dispose of its oil holdings and change its name to Keek Inc.
The company would have 322 million shares outstanding after the merger.
The companies have indicated that they will have $15 million in working capital after the merger, and will be looking to a private placement deal subsequently to raise additional financing to fund ongoing operations of Keek.
Shareholders of both companies will be asked to approve the deal before it can be finalized.
Shares in the $13 million market cap Primary have been halted for two days and will remain halted until the Exchange receives full documentation regarding the merger.