Kape Technologies Share Discussion Threads

[adamb1978] 14/2/2023 09:03

Was thinking this morning that this possibly also explains why the company hasnt moved to a more major stock market

The company would ahve needed Sagi to vote in favour of that move, and if he was eyeing up an offer for the company, he wouldnt want the re-rating which would result from the move

I still think this deal will be done in the 320-350p range, though would prefer if it Unikmind sold down some of their position and the company moved to the main market or Nasdaq. There's much greater value here than 350p

[rivaldo] 14/2/2023 08:40

Investors' Champion call the offer "derisory"......more developments to come here imo:



"Kape shareholders receive another derisory offer.

Shareholders in Kape Technologies (AIM:KAPE), the digital security software provider, are pondering over another derisory offer from the company’s main shareholder Unikmind Holdings.

Isle of Man incorporated Unikmind, which is wholly-owned by Teddy Sagi, controls approximately 54.8% of shares.

The current offer price of 285p per share is a modest 11% premium to the share price last week and only 7.5% up on the share price back in September 2022 when it raised $222m in support of acquisitions.

Perhaps Unikmind should change its name to Unkind!"

[gswredland] 14/2/2023 08:21

Hopefully Slater et al will have considerable influence given their large shareholding

[crosswires] 14/2/2023 08:13

Well who is going to accept an offer when the share price is already higher than that offer for a company that is obviously being undervalued 🤷🏼‍♂️

[johndoe23] 14/2/2023 07:52

Debating whether to buy more here...

[mrnumpty] 14/2/2023 07:10

On page 20 of today’s Telegraph , there’s an article about Sagi’s move . The article states “ The board rejected an initial proposal of 265p from Mr Sagi’s company Unikmind as offering ‘ insufficient value ‘ to shareholders “ . Who would have thought that , after recently announcing the best ever results by Kape , the share price subsequently fell by a sixth , and what a clever move to seize the opportunity to buy at a give-away price ?

[checkers2] 13/2/2023 20:40

From ft today:

Most tech investors are not used to low valuations. Teddy Sagi’s minorities should not settle for one either. The Israeli billionaire is offering to buy out minority shareholders in Aim-listed cyber security group Kape Technologies, valuing it at £1.25bn ($1.5bn). With more than half the shares already in Sagi’s hands, minorities should contest the skimpy 13 per cent premium to the three-month average price.

A cheap pound and low valuations have encouraged foreign investors to gobble up UK-listed tech companies. Kape, an acquirer of virtual private networks for mostly retail customers, is the latest. Disappointing results have weighed on the share price, down by half in dollar terms since the start of 2022, and underperforming the Nasdaq Composite by a third. At least the offer is higher than Kape’s most recent fundraising price at the end of last year.

Not that Kape is doing so badly. Purchasing Express VPN at the end of 2021 nearly trebled Kape’s revenues, estimated at $626mn last year. Express’s integration is progressing with $30mn of cost savings expected to be realised this year. Organic earnings growth is running at 17 per cent annually as of the first half of last year.

Sagi’s offer for Kape is worth 8 times forward ebitda, and in price terms still about 20 per cent below last year’s peak. Concerns about customer churn and cash conversion do weigh against Express VPN’s racy revenue growth profile.

Yet earnings per share growth could average 30 per cent between 2021 and 2024 assuming consensus forecasts are correct. That would suggest an attractive price/earnings compared to growth (PEG) ratio of 0.3. Usually, below 1 is attractive. UK-listed tech peer Avast was bought out by Norton LifeLock on a PEG ratio of 1.8, or an enterprise value to ebitda of 15 times in 2021.

Shares on Monday traded above the offer price. Even if Sagi controls most of the shares, Kape minorities still deserve more for their holdings.

[adamb1978] 13/2/2023 19:26

elbrus

They probably think that if they can get a handful of instis on board, then they dont need much from PIs to get to 75% needed to de-list...and as soon as it becomes likely that they'll get to 75%, everyone else capitulates

Their website lists the following as the next 3 largest shareholders:
Slater Investments 28,279,765 6.68%
Barnyard Investments Limited 24,320,814 5.74%
Pintando Holdings Limited 24,165,514 5.70%

If those don't fall into line that's c.18% against Sagi's offer and very difficult for him to get to 75%. Flip side is that if they do fall into line, he's at c.73%. No idea who Barnyardn and Pintando are but I dont see Slater accepting this offer.

Still think this gets done, but not at the current price.

Adam

[elbrus55] 13/2/2023 19:12

What is the purpose of the existing majority shareholder making an offer at 285p?They are not stupid.My best guess is that they want to talk the price up before another placing.

[wilske] 13/2/2023 17:45

Heres the final paragraph of the ST article. The link will only work for subscribers


However, Unikmind’s offer falls well short of the 500p-a-share fair valuation I outlined when I covered (at 285p) the interim results (‘Tapping into prodigious free cash flow generators’, 12 September 2022). The takeover premium is underwhelming. I would hope that other investors feel the same way to force Unikmind to come back with a higher offer that better reflects the value embedded in Kape’s existing operations and its growth prospects. The market is betting on this outcome as the shares (291p) are now trading above the 285p offer price. Await developments.

[sailorsam1] 13/2/2023 17:23

Id take 500p

[crosswires] 13/2/2023 17:16

I don’t think this is over yet, certainly wont selling any of my shares just yet…

[toptomcat] 13/2/2023 16:56

Just digesting the ST article. He has Kape at fair value 500p. The results in March should be very interesting!

[ali47fish] 13/2/2023 16:29

any chance of provising a link that works for non subscribers for inv chr please

[gswredland] 13/2/2023 16:11

Thanks John

[igoe104] 13/2/2023 16:11

Simon Thompson comments..

[elbrus55] 13/2/2023 16:08

They could also just proceed with their existing strategy doing another placing at c 265p (again) for their next acquisition?It doesn's sound like Unikmind really want to exit. The problem is the poor value placed on their efforts to date and the resultant cost of raising equity. Somebody else pays a few $ and gets a decent % of company. (A not allowed to dilute existing shareholders etc.)

[johndoe23] 13/2/2023 16:07

Coverage in IC by ST. Says await developments

[adamb1978] 13/2/2023 16:02

Unikmind cant be buying these shares in the market today unless they're going to increase the offer price to that level. Small beer though. I think we'll end up in the 320-350p range though and deal done at that price

[yorkie123] 13/2/2023 15:47

A view on LSE

DO NOT SELL - AVOID UNIKMIND TO REACH 75%Today 14:26
If Unikmind can't reach 75% threshold, they can't delist the stock and will either withdraw or bid higher.
Withdrawing is unlikely as their target makes Kape ridiculously cheap vs peers.
This leaves the only viable option, a higher bid.
Looking at median ev/ebitda multiple (c. 11x) this values kapes at 360p vs currently 290p c. 20%+ higher ! as other say "HODL" !!!

[elbrus55] 13/2/2023 15:36

Reading the press release , it seems that Unikmind is keen to continue to grow the company and doesn't want to take minority shareholders along at a realistic placing price of around 200p (at YE2022). They've got a point. It must be difficult and dilutive to make acquisitions in US if your own equity is so poorly valued.If the offer fails, I suppose they will have at least talked share price up to get a better placing price on new capital raises. M

[ali47fish] 13/2/2023 15:07

if there is vote a to delist- will there be time before the next step to sell this is if a vote to delist does t cause the share price to fll? any comments please

[slopsjon2] 13/2/2023 14:48

"Sagi should be careful what he wishes for- he might get a lot of disgruntled retail investors tagging along for the ride on the private markets!"

I wouldn't go private with your shares because Sagi will be the only one offering to buy them.

I had a share that went private, I thought that I didn't have to anything, come the delisting I was stuck with the shares. The directors made a low ball offer for the shares I declined, then they made a better offer but below what I had paid, then a third offer 20% above what I paid, which I excepted.

Would Sagi do this or simply keep making low ball offers. There would be no one else to sell to, as there are no market makers for private shares.

[blackhorse23] 13/2/2023 14:44

Out from here now at good time & bought CURY