I have been tracking K1 Ventures for more than 7 years and had invested in the stock over the years. K1 Ventures is an investment holding company invested in diverse sectors such as finance, transportation leasing, education and oil and gas.
Those who are vested in this counter would know that this is an excellent stock which had paid out huge dividends over the years. Since FY05, it had consistently paid out dividends amounting to a total of $0.2275 per share.
If you had bought the share 7 years ago at $0.33 and hold on to them till now, you would have an incredible yield of 68.9%. Now, how many stocks in SGX are capable of giving this sort of dividends nowadays?
Henceforth, I was pretty upset that GKB recently made a voluntary offer for K1 Ventures at $0.135 per share. For the uninitiated, GKB is an investment vehicle owned by Keppel Corp, CEO of K1 and BV Singapore. The consortium currently owns a combined stake of 62% in K1 and will own 100% on successful takeover.
The offer was so low that I didn’t even bother to think twice on whether to accept it. After all, if I hold on to the stock, over the next few years, I could potentially receive dividends well in excess of the current stock price, bearing in mind that many of the investments of K1 Ventures are riped for divestment.
K1 Ventures’ management team, led by Steven Green, has done a great job investing and turning around companies. I believe the total sum of their investment holdings should be around $650 million and therefore each share should be valued at $0.30 instead of $0.135. This valuation was based on the latest research report by OSK DMG.
So far, the offeror has received about 75% of the acceptance shares. As it is still short of the conditional 90% for the deal to go through, the management has extended the deadline for the offer to 29 August 2012. To me, the offer is too unacceptable for the minority shareholders and I will not accept it unless it is revised. The management of K1 has to do justice to the minority shareholders who had supported the company over the years and make a better offer.
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SG Wealth Builder