Kitwave Share Price (KITW)

If you look at the recent RNS feeds there are several funds that are increasing their stakes at 297 - above the bid price. They must be thinking they can get more. I’ve sold about 25% of mine at that price to lock in a gain but will hold the rest to see if a better price can be achieved. The founder Paul Young hasn’t openly backed it. I’ll see where he lays hit hat.

Re:

I can share how I’m personally thinking about the bid, without telling anyone else what to do.

I’m a buy-and-hold investor. I look for high-quality businesses that can compound for many years, and those are relatively rare. Kitwave fits that description for me.

On valuation, the offer looks very low relative to the quality of the business. The implied multiple is single-digit P/E, which feels hard to reconcile with a company that dominates its niche, has resilient cash flows, and a long runway for growth - the proposed price is at level I’d normally associate with declining or ex-growth companies.

Beyond price, I’m also uncomfortable with the process. There doesn’t appear to have been an open sale or competitive auction; instead one bidder seems to have been favoured early, with significant irrevocable support including from a single large shareholder. Since the announcement, at least one of those irrevocables has fallen away, which adds to my unease.

I’m only a small shareholder, but I’ve raised my concerns in a letter to the board and am currently inclined to vote against the scheme. From public disclosures, there is clearly a lot of register reshaping going on, and it doesn’t yet feel like the outcome is settled.

Personally, I’m holding for now. That could mean a revised offer, a competing bid, or simply remaining invested in a good business if the deal doesn’t proceed.

What troubles me most is the idea that long-term shareholders may be asked to give up many years of future compounding to a private equity buyer at a price that doesn’t reflect that potential.

That’s just my perspective — others will quite reasonably see it differently.

At the moment you have two choices.

1) Sell in the open market at todays price (293)

2) Hold and see what happens - I am doing that.

There are multiple different outcomes.

Most likely is the bid goes through, and you will have to sell your shares to the bidder (295p)

Another bidder could emerge, and the price will go up. I'd say there is about 25% chance of this happening.

The bid could fall through - either through not getting enough support or through someone else buying a stake and refusing to back the bid (this happened with Playtech/Tribal/Inspecs). I don't see this latter as particularly likely.

I assume you have your shares in a nominee account. ie you hold them online with a broker. If thats the case your broker should send you a message in time saying there is a takeover and what will happen next. You may get the chance to vote yes/no to the takeover, but often brokers don't allow this and whilst I'd like to be able to do it more often my holdings are two small to make any difference in a vote. In my case I normally have to instruct my broker in good time to vote at AGMs, but I rarely bother.

Often with takeovers if a bidder offers 295p the price to sell in the market would be around 285p - so you lose a bit for selling earlier and not taking the risk it fail. I'm not sure why this is so close to the offer. Perhaps there is more speculation on a counter. But I'd suggest if nothing is said in the next couple of weeks I'd expect the sp to drift a bit lower until the bid goes through. Good luck with whatever you decide to do.

New event for me takeover £2.95. Are we supposed to wait for completion or sell now at same price, Is there any reason to wait ?

Will the price change ?

Dividends maybe ?

I am not sure as a share holder, what iam.suppossed to do in this event, any help would be appreciated. Thanks in advance

Offer price is a little disappointing. Probably worth waiting for a week or two for a counteroffer now that this is in play and SP only 1% below the offer.

The negative sentiment that is being perpetuated around the UK market is allowing PE to cherry pick assets, take it or leave it