KVB Kunlun directors selling, while shares continue to move up

The value of stock in Hong Kong focused retail FX brokerage KVB Kunlun Financial Group Ltd (HKG:8077) has accelerated dramatically over the last two days, however just as this spike made itself present, two of the firm’s directors have sold their stake in the firm.

Director Cornelis Jacobus Keyser sold his entire portfolio of 200,000 shares in the company at HK$1.50 per share, in a transaction which took place on April 2, and Chee Hung Frederick Ng sold the 1.5 million shares that he had held in the firm across ten transactions on April 2 at prices ranging between HK$1.5 and HK$1.6 per share.

Merger and acquisition activity often has an effect on the internal structure of corporate leadership as well as on the value of its stock, and in this regard, KVB Kunlun is no exception, with CITIC having acquired a majority 60% stake in the firm in February this year for HK$780 million.

This morning, shares in KVB Kunlun accelerated rapidly, trading up a remarkable 19% representing an all time high, therefore it is apparent that traders are betting on a better bid from CITIC than the official HK$0.65 paid by CITIC so far.

At the beginning of this month, KVB Kunlun’s Board of directors said an aggregate of 21,320,000 new KVB shares were allotted and issued on April 1, 2015, following the exercise of certain KVB Options. The latter were granted under the share option scheme from June 3, 2013. The exercise price was HK$0.414 per KVB share, which represents a 72.58% discount on the share price at market close on the preceding day (HK$ 1.51).

Whilst KVB Kunlun has made no statement to this effect, it is possible that Mr Keyser and Mr Ng could be preparing to leave following the acquisition by CITIC, however it certainly appears that they decided not to wait for a potential better bid from CITIC to the public shareholders.


For the official announcement relating to the sale of shares, click here and enter stock code 8077.

Chart courtesy of Google Finance.

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