Kape Technologies has become the latest UK-listed tech company to consider leaving the UK stock exchange after receiving a £1.25bn takeover offer from majority owner and Israeli billionaire Teddy Sagi.
Sagi, who also owns Camden Market in London and founded betting software group Playtech, blamed “thin stock market trading” in Kape’s shares for the decision to attempt to take the company private.
The shareholders of Kape, which is listed on London’s junior Aim market, will be offered 285p per share, valuing the business at £1.25bn. Shares in Kape rose 12 per cent to 290p on Monday morning.
If agreed by the remainder of shareholders, the digital security software company will join a growing roll-call of UK-listed tech companies to be taken over in the past two years, including industrial software group Aveva and cyber security group Avast.
Bankers and company founders have complained that investors in the London stock exchange fail to value promising tech companies highly enough, and have instead focused on larger companies with stable dividends.
“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,” Sagi said in a statement.
Online retailer Seraphine last month blamed the “substantial costs” of being a listed company in the UK when revealing a similar take-private offer from its major shareholder Mayfair Capital. Seraphine was one of 33 tech initial public offerings in 2021, with all but one now trading at a deep discount to their initial offer prices.
The takeover activity will provide a counterweight to the excitement of the FTSE 100 hitting a record high last week, with the rally in part based on the demand from investors for international companies in mining, energy, banking, industrials and utilities rather than smaller tech stocks.
The UK government has attempted to make it easier for start-ups to move to the public market through a series of stock exchange reforms, although last year’s global slump in investor interest in IPOs stalled moves among companies to take advantage of the new rules.
Kape rejected a 265p per share proposal from Sagi as “insufficient value” for shareholders before Christmas. But the board allowed Sagi’s investment vehicle Unikmind access to limited information about the business and its prospects to encourage a higher offer.
Unikmind then made a revised proposal of 285p per share on January. It needs about 75 per cent of the total voting rights in Kape to agree to delist its shares from Aim. Kape’s board has told shareholders to take no action for now.