It appears, at least for the time being, that CITIC is content with staying at a 59% holding in KVB
KVB Kunlun shares collapsing after CITIC Securities offer expires
Shares in Hong Kong based retail forex broker KVB Kunlun Financial Group Ltd (HKG:8077) traded down 16% this past week, including an 11% decline on Friday July 3, after CITIC’s offer to buy out the public shareholders expired the previous week, on July 26.
KVB shares are off 29% since the beginning of June.
It appears, at least for the time being, that CITIC is content with staying at a 59% holding in KVB. As we previously reported, China’s CITIC Securities Company Limited (SHA:600030) finalized its purchase of 59% of KVB in late February from KVB’s former majority shareholder Li Zhi Da, paying him HK$0.65 per share, or a total of $101 million.
KVB’s shareholder table remains:
(Note that ‘Vendor’ is Li Zhi Da, ‘Offeror’ is CITIC Securities).
By virtue of Hong Kong takeover law, CITIC was required to make a similar (or better) offer to buy out KVB’s public shareholders. CITIC did, keeping its offer open until Friday June 26, but never offered more than the same HK$0.65 per share, despite KVB’s shares trading up in the interim to as high as HK$2.30.
Only 0.02% of KVB’s shares were tendered into the offer. Not surprising, given that shareholders could sell on the open market for a whole lot more.
And now, it appears as though those speculators who have been holding out for a better offer from CITIC have had their bluff called, and are dumping the stock.
David Hobart
David Hobart is Managing Director of FinAffiliates Limited, the UK media group behind LeapRate, AskTraders and a network of more than 30 financial and trading titles published across several languages and regulated markets. He writes on the commercial side of the industry: broker marketing, client acquisition, affiliate strategy and the editorial standards that hold it together. He is based in North Norfolk.
