Nearly two months after it had first reported that an acquirer had emerged to make a HK$0.65 bid for the company, Hong Kong retail forex broker KVB Kunlun Financial Group Ltd (HKG:8077) has provided an update, and in truth it isn’t much of one.
KVB has made a further filing with the Hong Kong Exchange (HKEx) that the still-unnamed acquirer is (still) engaged in due diligence examination of the company. However KVB could not determine yet whether a deal would indeed take place or not.
The still-unnamed acquirer paid a required exclusivity fee of HK$50 million (about USD $6.5 million) to KVB’s controlling shareholder Mr. Li Zhi Da back in December when due diligence began.
While the HK$0.65 per share offer technically was made only for Mr. Li’s stake in the company (representing more than half the company’s shares), Hong Kong’s Takeover Code states that an acquirer buying more than 30% of a company gives rise to an obligation for the acquirer to make a mandatory unconditional general offer for all the other company shares. So if the deal with Mr. Li goes ahead, the mystery acquirer will need to make a general offer for all KVB shares, at terms no worse than Mr. Li receives.
KVB shares have come way down from original speculation after the (possible) deal was announced at the end of November, when the shares topped out at HK$1.67, but at HK$1.04 currently remain well above the HK$0.65 official offer price – indicating that traders expect some sort of deal to indeed go through, and to go through at terms much improved from HK$0.65.
KVB Kunlun share price November 7 to present. Source: Google Finance.
To see the updated KVB filing with the HKEx click here.