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:

KVB Kunlun shareholders

(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.

KVB shares July 2015


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