Volatile company stock prices make KVB Kunlun a takeover target


A company whose fortunes have taken a turn for the better during the last quarter of this financial year is Hong Kong-focused KVB Kunlun.

The first half of this year’s results culminated in the company announcing a loss of $5.2 million, prior to which KVB Kunlun’s directors issued a warning to shareholders to exercise caution when dealing in KVB Kunlun company stock.

This downturn of fortunes came to a shuddering halt in the third quarter, however, when the firm made such headway, that all of the losses in the first six months were erased completely, resulting in a strong upturn in share value by 130%, a dynamic which LeapRate has kept a keen eye on, with the company listed on the Hong Kong stock exchange (HKex).

Today, KVB Kunlun’s board of directors have issued an announcement via HKex that this rapid variation in share prices has positioned the company as an attractive proposition for takeover.

Whilst KVB Kunlun’s board of directors have not specified a particular reason that such movements have occurred, the board has been acknowledged by the controlling shareholder of the Company, KVB Kunlun Holdings Limited (the “Controlling Shareholder”), that it has been approached by an independent potential investor (the “Potential Purchaser”) in relation to a possible acquisition of all or part of the 1,500 million Shares owned by the Controlling Shareholder.

Discussions are at a preliminary stage without any definitive agreement in any form whatsoever and may or may not result in any transaction. As at the date of this announcement, the relevant securities of the Company comprise 2,000 million Shares in issue and, as at 31 October 2014 which is the latest practicable date for
ascertaining such information, outstanding options to subscribe for up to 38,280,000 Shares.

Apart from the aforementioned, the Company has no outstanding securities, options, warrants or derivatives which are convertible into or which confer rights to require the issue of Shares and has no other relevant securities.

There is no assurance that the discussions will result in any agreement between the Controlling Shareholder and the Potential Purchaser. However, if and when an agreement is reached, the Potential Purchaser may be required to make a mandatory offer for all issued Shares (other than those already owned or agreed to be acquired by the Potential Purchaser and parties acting in concert with it) in accordance with Rule 26.1 of the Takeovers Code.

The Directors will keep the market informed in compliance with the GEM Listing Rules and the Takeovers Code and in particular by way of announcement on a monthly basis until an announcement of firm intention to make an offer under Rule 3.5 of the Takeovers Code or of a decision not to proceed with the Possible Offer in compliance with the Takeovers Code. Securities holders of the Company and potential investors should exercise caution when dealing in the securities of the Company.

With the wave of mergers and acquisitions in the FX industry which began last year when GAIN Capital purchased GFT, followed by a series of others including FX companies purchasing the client bases of their peers, investments in specialist niche companies, the revival of old-stagers, and successful IPOs of relatively new companies which provide specific services to FX firms, showing no sign of relenting, this keen proposal to purchase KVB Kunlun may prove to be another large scale transfer of ownership attesting to the intrinsic value of such entities.

For the full announcement from Hong Kong Stock Exchange, click here

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Volatile company stock prices make KVB Kunlun a takeover target

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