Kape Technologies Share Discussion Threads

[suetballs] 20/2/2023 13:41

Also per ii the latest response date is 15th March.
Hopefully a lot will have happened before then.
Suet

[elbrus55] 20/2/2023 13:31

I noticed the corporate action in my ii.co.uk account has "do nothing/do not accept cash offer" as the default option. I actively selected even though it should make no difference.That default option presumably applies to all shareholders private& institutional. It will make it more difficult for unikmind to get 75% acceptance.

[adamb1978] 18/2/2023 10:27

Thanks Wilske. They're probably too small to have a separate IR team. Based on what I see in my professional life, £1bn or so market cap tends to be around the point where companies start thinking about having a dedicated IR function. For KAPE, given the tightly held nature of the share capital, that threshold is probably higher still

[wilske] 18/2/2023 09:44

Adam

Yes those are fair points. I have asked them why its was not included and told them I would expect the BoD to include forward guidance for 2023 in the official response to the 285 offer which we are waiting for.

BTW- there is no actual IR email that I could find. I emailed the info address and a PA responded within a couple of hours asking me what my question was and telling me she would forward it on

Will share any response I get back

[adamb1978] 17/2/2023 13:23

Hi Wilske

Certainly worth asking that question. 'Guidance' is more of a US thing I find rather than UK and worth noting that if you take last year's start of year trading update, the guidance which they gave was just a reiteration of the guidance at the announcement of the ExpressVPN deal.

Without checking, I believe it was the same at the time of the previous major M&A deal, so I'd view their guidance more in conjuction with those deals rather than being a Jan/Feb routine. Certainly in early 2022 it was.

I'd be interested to hear what their IR folk tell you though!

Adam

[wilske] 17/2/2023 11:29

One addtional point here is that there was no 2023 guidance in the trading update which is very unusual for Kape. They included it in the last two years trading updates. So Im guessing that Sagi has put pressure on not to include that as would increase short term value. I will contact investor relations and ask that question. The BoD have a fudiciary duty to act on behalf of all shareholders so given they aleady have funds for a major acquisition and there are cost savings and organic growth already baked in, they could have should put out a revenue and Ebitda forecast for 2023.

[death by donut] 16/2/2023 17:28

Shares mag saying sell , as it's up 24% since there tip 3 mths ago.Good luck with that.DbD

[wynmck] 16/2/2023 16:24

DVO shareholders getting an increased final offer today making that a 100% premium from the closing price pre the first offer.....and Sagi thinks 9% is a "significant"premium!Think again Ted.

[tole] 15/2/2023 18:41

https://masterinvestor.co.uk/equities/small-cap-catch-up-cyber-security-bricks-shipbroking-and-debts/Kape Technologies (LON:KAPE) – Teddy The Price Is Not Cuddly EnoughWhat 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.

[adamb1978] 15/2/2023 18:03

Agreed igoe. For clarity, the biggest downside probably comes from him not increasing his offer and the offer not getting to the acceptance condition (which i assume is 90%) and also him not getting to the 75% to delist.

Therefore the offer lapses and we return to where we were. However the share price is so chronically cheap that even without the offer we should get to that offer price very soon.

Lets see what happens in the next few days. My money says there will be a higher offer

[igoe104] 15/2/2023 16:30

Large buyers still buying well over the offer price. I'm certainly holding out for a bigger offer, could be decent upside against a small downside.🤔

[adamb1978] 14/2/2023 18:57

Hi Podgyted

I disagree in a few respects. You said:

(1) "Not sure Sagi wants to buy Kape in its entirety - but I do think he wants to take it off the market and continue to grow it in the private sector (he provides most of the money anyway) and list it in the US in a few years.

That might well be attractive to other large holders so a delisting vote might pass the 75% threshold."

I'm not sure Slater holds private investments (perhaps I'm wrong) and similar with other institutions - they'll be limited by the fund formation docs. I doubt most can do that, whether they want to or not. Perhaps the other two entities holding around 5%/6% might be persuaded to, but they'd be taking a lot on trust with someone who they have limited background with

(2) "If that happens then a lot of smaller holders will be forced sellers - with only one or two buyers."

'Forced' sellers - not sure why people would be forced?

(3) "No news from the BoD today - used to a rejection on the day or the day following."

They issued their response yesterday telling people not to take any action. See RNS at 715am. They'll be in the process of speaking to institutions. Another announcement today would be unlikely. As I've said before on this, my expectation is a revised offer in the 320p-350p range, probably by the weekend


I think there's much more to come on this and no reason to sell now. Sagi has made an offer which he cant withdraw. In a worst case, people accept that offer in the next few days, he gets towards 90% needed to squeeze out minorities and you could sell next week or the week after. He can't suddenly withdraw the offer. I see limited to no reason to sell today unless someone has personal reasons to do so or wants to redeploy capital asap, however we're all different.

Adam

[podgyted] 14/2/2023 18:16

It's also worth considering that:-

"Any cancellation of a company’s securities on AIM will be conditional upon seeking shareholder approval in general meeting of not less than 75% of votes cast by its shareholders present and voting (in person or by proxy) at the meeting."

It's not 75% of share capital but 75% of those shares voted - that will be in Sagi's favour. Nominee account, shareholder apathy .....

The holdings of Burchhardt and Pomerantz (ExpressVPN)are key - see forms 8.3 today.

[shaan449] 14/2/2023 18:15

Hi Adam,Sagi is not stupid,he's done many deals..he knows well the Aim markets soft stance.He will not break any laws...but is a brilliant corporate raider under the raider using any vehicle to get what he wants ..all the the expense of the PI.His people are on the kape board and knows their every move ahead of their thinkings.I suggest you and other fellow PI look up how the AA and Paysafe were bought out at outlandishly cheap valuations.Await your views soon

[podgyted] 14/2/2023 17:34

Not sure Sagi wants to buy Kape in its entirety - but I do think he wants to take it off the market and continue to grow it in the private sector (he provides most of the money anyway) and list it in the US in a few years.

That might well be attractive to other large holders so a delisting vote might pass the 75% threshold.

If that happens then a lot of smaller holders will be forced sellers - with only one or two buyers.

No news from the BoD today - used to a rejection on the day or the day following.

On that basis I've thrown in the towel today.

Good luck to those who remain.

[adamb1978] 14/2/2023 16:30

Hi Shaan

If those two investors do team up with Sagi then its a done deal. However under the takeover code, whatever he offers to them he needs to offer to all shareholders. Therefore he can't do some sort of sweetheart deal with them and given the nature of this offer (majority shareholder, price which pretty much every publication is reporting as derisory) its something whcih the Takeover Panel would be watching closely

Adam

[shaan449] 14/2/2023 13:52

I hope you are right? look at the AA and Paysafe as eg..they were taken over v v cheaply by parties which had got into bed with the VC and the PI got their fingers burnt.Look no further than currently @ TRMR ,this also will be taken over @ dirt cheap valuations compared to its US peers

[elbrus55] 14/2/2023 11:36

Barnyard and Pintendo look like the shares held on behalf of the two founders of ExpressVPN, from that takeover. One of them is a NED of KAPE.

[shaan449] 14/2/2023 10:35

So Sagi & his buddies hold 55+ 11= 66%..only 9% needed to cross the 75% with a final offer of 305 max.This is his MO

[rivaldo] 14/2/2023 10:28

To give Sage a little credit, Safecharge (SCH) was one of his and worked out extremely well for us shareholders.

I agree AdamB1978, I suspect Unikmind will talk to the major shareholders (Slater etc) and be told of the need to increase their bid further, perhaps to 340p-350p at the least.

Personally I see no reason why KAPE shouldn't have been trading on the market at prior levels of 400p-450p, necessitating a bid of anywhere from 530p-600p. Which given the high revenue visibility, customer growth, excellent cash flow subscriptions paid in advance and market positioning seems entirely reasonable imo.

[shaan449] 14/2/2023 09:23

Barnyard investments and Pintando holdings Looks like vehicles used by Sagi or his friends given the opportunity to make a few bucks in exchange.Same tactics used in Paysafe which was bought for a song by Sagi.TRMR going the same way,watch this space.