Mergers, acquisitions and takeovers are inevitable in any industry, and on the volatile Forex market these incidents occurs regularly. In a preceding article it was reported that Hong Kong based retail currency broker, KVB Kunlun Financial Group Ltd (HKG:8077), made a public announcement of reaching a contract with CITIC Securities Company Limited, a Chinese Investment bank. The contract entailed an acquisition of 60% of KVB’s issued shares, therefore forced a halt to trading on the KVB Kunlun shares temporarily at 9 am Honk Kong time, February 18, 2015.
Today, KVB Kunlun Financial Group Ltd and CITIC securities, made a joint announcement revealing that the CITIC has concluded its 60% stake purchase. The deal involves a conditional agreement to acquire 1,200,000,000 KVB Shares, at HK$0.65 per share totaling a cost of HK$780 million (USD$100.5 million), which represents an aggregate of 60% of total KVB shares.
Evidently, this deal has ensured CITIC to complete the takeover of the Hong Kong broker, as it played by the books following the Hong Kong’s Takeover Code. Since this manifest clarifies 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”. Therefore, as the Chinese investment bank will make an unconditional offer for the remaining KVB shares, therefore prompting cancellation of all the outstanding KVB Options in the duration prior to the close of the Share Offer.
The unconditional offer consists of both share and option offers, specificallyl the share offer will be HK$0.65 worth, whilst the option offer is HK$0.236 worth. Evidently, the prominence CITIC-KVB acquisition sails through, marking yet another high profile acquisition in the industry.