Where will KVB Kunlun shares trade on Friday?

As we reported earlier today, China’s CITIC Securities Company Limited (SHA:600030) has finalized its purchase of 60% of Hong Kong retail forex broker KVB Kunlun Financial Group Ltd (HKG:8077) for HK$0.65 per share, or total consideration of HK$780 million (about USD $101 million).

So after four weeks of having trading in its shares suspended, KVB shares will restart trading on the HKEx on Friday, February 27.

The $64,000 question of course is: Where will the shares trade?

In the circular sent out today, CITIC indicated that – pursuant to Hong Kong takeover law – it will now proceed with an offer to acquire the ‘public’ shares of KVB. That offer will be made at the same price it paid to KVB’s majority shareholder Li Zhi Da – HK$0.65 per share.

But when last traded at the end of January, KVB shares sat at more than double that amount, or HK$1.41.

Also since the original offer HK$0.65 price was set, KVB stated that it will report a very robust Q4. (Full financial results for Q4 and full-year 2014 won’t be out until the end of March).

Will CITIC have to raise its offer if it wants to take the company private?

Stay tuned to LeapRate as we continue to cover this story.

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