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"Kape Technologies (LON:KAPE) – Teddy The Price Is Not Cuddly Enough
What do you do when a company, in which you control 54.8% of the equity, is not being afforded a realistic market rating?
That must have been a quandary facing Teddy Sagi, the Israeli-Cypriot multi-billionaire financier whose cyber security software services group Kape Technologies was suffering such a low valuation.
So last December, when its shares were trading at only 225p, he approached the group’s Board with a 265p a share cash bid for the 45.2% that his Isle of Man-based Unikmind investment company did not already own.
The approach was rebuffed.
In a statement to The Financial Times Sagi commented:
“Having weighed the pros and cons of a public listing under the current macro uncertainties and thin stock market trading as well as new growth avenues, we are firm in our view that Kape’s next chapter in its corporate journey should be within the private arena.”
On Monday of this week Sagi, who also owns Camden Market in North London, came back with his offer to the Board, after he was enabled to do so following restrictions being lifted.
Again, the offer has been rejected by the Board, who advise shareholders to await their next comments.
Immediately it became public knowledge, the shares lifted in price to touch 295p before resting 35p higher on the day at 292p.
The dealing volume in the shares was nearly 100 times greater than the daily average, with some 31.8m traded on Monday.
Last night they closed at 292.5p on the back of some 3m shares being traded.
Such a cash offer may not succeed, however what Sagi has now given the market is a very clear marker of the price that he is more than willing to pay for this cracking technology services group’s shares.
Hold very tight and remember that just fifteen months ago they were up to 455p – although it may take a long time before my 2021 Target Price of 600p is achieved.
I would guess that when he is able to, Sagi will dip into the market and soak up more shares.
No doubt he will table a proposal to shareholders that the group is taken private, but he will need at least another 21% of the group’s equity under his belt to secure such a voting victory.
Come on Teddy give shareholders a good cuddle with a better price than 285p for their shares – you know that you can afford it and you also know that the shares are worth well over 400p at least.
That does not mean that another bid would need to be around that price, but 325p a share feels a great deal more attractive."