KVB Kunlun Financial Group Ltd (HKG:8077), the Hong-Kong focused retail Forex broker, announced earlier today that it had completed its share purchase agreement with Chinese investment bank CITIC Securities Company Limited (SHA:600030).
CITIC Securities established a new subsidiary in Hong Kong on April 17, 2015 – CITIC Securities Overseas Investment Company Limited. This new company has been nominated “offeror” for the deal with KVB Kunlun. As of today, May 29th, it is this new entity that holds a 59.37% stake in the broker, or 1.2 billion shares.
Under Hong Kong’s Takeovers Code, CITIC will have to make unconditional mandatory cash offers for the entire issued share capital of KVB Kunlun and for the cancellation of all the outstanding KVB Options (no matter vested or unvested). CITIC Securities said it will finance the cash consideration payable for the Offers by the Offeror from its internal resources. CITIC Securities Corporate Finance (HK) Limited will make the Offers for and on behalf of the Offeror.
CITIC acquired the 59.37% stake in KVB at a price of HK$ 0.65 per share. Now the shares in the broker trade at levels that are nearly three times higher than this bid. The big question remains: Will CITIC raise the bid?
Meanwhile, shares in KVB Kunlun had a very robust week. In fact, on May 27, 2015, one share in the broker traded as high as HK$1.85, which is close to the all-time high seen on April 14, 2015, when one share in the company traded for HK$1.90. The shares lost some of this advantage on May 28th and May 29th, but still ended the week on a relatively high note at HK$1.73 per share.
Three-month share price chart of KVB Kunlun. Photo credit: Google Finance.
To view the official announcement about the share deal completion, click here.