The controlling shareholder of Hong Kong-listed Kingston Financial Group, an investor in the Macau casino sector, offered investors HK$0.30 ($0.03821) per share and proposed taking the company private.
The proposer is Active Dynamic, Inc., a British Virgin Islands company wholly owned by the group’s chief executive and co-founder Polianna Chouewa, according to a filing Monday evening. She is also a controlling shareholder of Kingston Financial, and according to the filing, the company’s stake is just over 74.6%.
Ms Chu is acting in partnership with other shareholders, controlling a combined 74.93% stake in Kingston Financial.
The company suspended trading of its shares on Oct. 14 until internal information was released. Trading in the stock resumed Tuesday morning.
Kingston Financial is interested in the grand views of Macau Satellite Casa Real and taifa on the city peninsula. Venue will continue to offer the game until at least Dec. 31, with gaming rights extended to that date by license provider SJM Holdings Inc. 슬롯머신
On Oct. 13, after trading hours, the proposer asked the board to submit proposals for privatizing the company through a clearing plan under the Hong Kong Company Act, according to Monday’s filing.
The tender represents a premium of “about 47.78%” from the closing price of HK$0.2030 per share on October 13, the last trading day, the filing stated. The total value of the transaction should not exceed HK$1.04 billion, as the co-conspirator merely intends to acquire nearly 3.46 billion shares. The transaction must be approved by at least 75% of the company’s independent shareholders.
Global Equity Research analyst Arun George said in a note on Tuesday on the Smart Karma platform that the proposed price of HK$0.30 per share is “not attractive to long-term shareholders.”
Mr. George attributed the offering price to 83% off, 81% off, and 48% off the 10-year, 5-year, and 3-year average stock prices, respectively.
“Notably, the stock has exceeded its public offering price by April 1, 2022,” the analyst added.
Kingston Financial suggested in a filing Monday that the business environment in which the controlling shareholder’s privatization efforts operate was “under unprecedented significant challenges and uncertainties.”
The company said “financial market volatility” and “uncertainty” about economic growth and rising inflation were negatively impacting the group’s securities brokerage, acquisition and placement services, as well as margin and IPO financial services.
Kingston Financial also indicated that its hotel and gaming business in Macau was constrained by travel restrictions “imposed by various cities” in mainland China. “It is uncertain when the negative impact on Macau’s tourism and gaming industry will end and when it will fully recover to pre-pandemic levels,” the group added.