Sono Group NV (NASDAQ:SSM) shares rose 59.3% in pre-market trading after the company and privately held Sports One announced a non-binding letter of intent for a proposed business combination.
Under the proposal, the combined company would operate as a publicly traded permanent-capital business focused on acquiring and holding minority interests in NFL, NBA, MLB and NHL franchises. It would also operate a sports intelligence business serving athletes, teams, universities, brands and sponsors.
If the transaction is completed, the combined entity is expected to be renamed Sports One and led by Sports One’s existing management team. The proposed combination would represent a change from Sono Group’s previous focus as a digital asset treasury company.
The letter of intent is non-binding, and completion of the proposed transaction has not been confirmed.
Investors acquire 19.9% stake in Sono Group
Alongside the proposed combination, a group of investors, including affiliates of Sports One, purchased 283,500 ordinary shares in Sono Group through a registered direct offering.
The shares represent 19.9% of Sono Group’s outstanding shares and were purchased at market price without a discount or warrant coverage.
Each participating investor also agreed to a 180-day lock-up period. Sono Group said proceeds from the offering are intended to be used for working capital and general corporate purposes.
Proposed transaction would shift Sono Group’s business focus
The announcement came as broader U.S. equity markets were indicated lower in pre-market trading, with futures linked to the S&P 500, Dow Jones and Nasdaq declining.
Sono Group shares had been trading near the lower end of their recent range before the announcement, with a 52-week low of $2.35.
If completed, the proposed combination would shift the company’s focus towards professional sports franchise investments and Sports One’s operating sports intelligence activities.
The transaction remains subject to the parties progressing beyond the non-binding letter of intent and completing the proposed combination.