Most Kwai Chung Limited: Major Share Acquisition and Mandatory Unconditional Cash Offer by Brave Steed Legacy Limited

Executive Summary

Most Kwai Chung Limited (“the Company”, Stock Code: 1716) has announced a significant change in its shareholding structure following the acquisition of a controlling stake by Brave Steed Legacy Limited (“the Offeror”). This transaction triggers a mandatory unconditional cash offer for all remaining shares, which could have a substantial impact on the Company’s share price and future direction.

Key Developments

• Acquisition of Controlling Stake: On 5 March 2026, Brave Steed Legacy Limited acquired 175,500,000 shares (65% of the total issued share capital) of Most Kwai Chung Limited from Blackpaper Limited for a total consideration of HK\$122,200,000 (HK\$0.6963 per share).
• Completion Date: The acquisition was completed on 12 March 2026.
• Mandatory Cash Offer: As required by Rule 26.1 of the Takeovers Code, Brave Steed Legacy Limited, through Kingston Securities, is making a mandatory unconditional cash offer to acquire all remaining shares not already owned or agreed to be acquired, at HK\$0.6963 per share.
• Offer Price: The offer price represents a significant discount of 42.45% to the last trading price of HK\$1.21 per share on the Last Trading Day, but a premium of approximately 258% over the unaudited consolidated net asset value per share as at 30 September 2025.
• Financial Backing: The Offeror has secured a loan facility from Kingston Securities to finance the acquisition and the offer, pledging all acquired and future offer shares as collateral.
• Intention to Maintain Listing: Brave Steed Legacy Limited intends to maintain the Company’s listing status on the Stock Exchange, subject to public float requirements.
• Resumption of Trading: Trading in the shares was halted on 6 March 2026 and resumed at 9:00 a.m. on 13 March 2026 following this announcement.

Details of the Transaction

Sale and Purchase Agreement: The agreement, executed after trading hours on 5 March 2026, involved Blackpaper Limited (Vendor), Mr. Iu and Mr. Luk (Vendor’s Warrantors), Brave Steed Legacy Limited (Purchaser/Offeror), and Dr. Ma (Purchaser’s Warrantor). The 175,500,000 shares were sold free from encumbrances, with all rights attached, at approximately HK\$0.6963 per share. The consideration was settled using HK\$80 million in internal resources and HK\$42.2 million from a loan facility.

Historical Restrictions Lifted: A previous undertaking by Mr. Iu and Mr. Luk (from the 2021 share transfer) to maintain at least 65% shareholding until 31 July 2026 was discharged for HK\$9.4 million, allowing this sale to proceed.

Mandatory Cash Offer

• Scope of Offer: The offer targets the 94,500,000 shares (35% of total issued shares) not already owned by Brave Steed Legacy Limited and its concert parties.
• Valuation: The total value of the offer is HK\$65,800,350, valuing the entire company at HK\$188,001,000.
• Unconditional Offer: The offer is unconditional and not subject to any minimum acceptance threshold.
• No Increase in Offer Price: The Offeror has explicitly stated it will not increase the offer price.
• Payment Terms: Payment to accepting shareholders will be made within seven business days after valid acceptance, and seller’s stamp duty will be deducted from the payout.
• Public Float: The Offeror intends to ensure that at least 25% of the shares remain in public hands to maintain listing status. Any shortfall may result in suspension of trading by the Stock Exchange.

Shareholding Structure Before and After the Transaction

Financial Information on the Group

• Net Assets (as of 30 September 2025): HK\$55.3 million (unaudited).
• Total Revenue: HK\$45.0 million for the six months ended 30 September 2025.
• Profit for Six Months to 30 September 2025: HK\$1.4 million.
• Net Asset Value per Share: HK\$0.1946 (unaudited, as of 30 September 2025); Offer price is a premium of 258% to this NAV.

Offeror’s Background and Intentions

The Offeror, Brave Steed Legacy Limited, is a BVI-incorporated entity wholly owned by Dr. Ma Liyang, who has substantial experience in high-tech and environmental enterprises in China, including a research center partnership with Tsinghua University. Dr. Ma intends to maintain current management and operations, with no plans for material changes in employment or business, but may review and explore new business opportunities for long-term growth. No concrete plans for asset injection or disposal have been formulated yet.

The Offeror intends to nominate new board members post-offer, subject to regulatory requirements.

Important Considerations for Shareholders

• Offer Price at Discount: The offer is at a substantial discount (up to 42%) to recent trading prices, but at a significant premium to the Company’s net asset value. Shareholders should carefully consider whether to accept the offer or retain their shares, especially given the Offeror’s stated intention not to increase the offer price.
• Potential Board Changes: Expect changes to the board composition after completion of the offer, which could influence the Company’s future direction and strategy.
• Public Float and Trading Suspension Risk: If public shareholding falls below 25%, trading in the Company’s shares may be suspended. The Offeror has committed to take steps to restore public float if necessary.
• Tax and Legal Implications: Overseas shareholders and all investors should seek professional advice regarding tax and regulatory implications of accepting the offer.
• Financial Backing: The offer is fully financed via a secured loan facility, ensuring that all valid acceptances will be paid in full.
• Independent Advice: An Independent Board Committee and an Independent Financial Adviser will provide recommendations to shareholders in the forthcoming Composite Document. Shareholders are urged not to take action until that document is issued and reviewed.

Timeline and Next Steps

The Composite Document, including full terms of the offer, independent advice, and a form of acceptance, will be sent to shareholders within 21 days of this announcement. Shareholders should await this document before making any decisions regarding the offer.

Conclusion

This is a transformative, price-sensitive development for Most Kwai Chung Limited. Shareholders should note the discounted offer price, the change of control, possible board changes, and the stated intention to maintain listing status. Given the potential strategic changes and implications for share value, investors are strongly advised to monitor further announcements and consult professional advisers before making any decisions.

Disclaimer: The above article is for informational purposes only and does not constitute investment advice. Shareholders and investors should refer to the Company’s official disclosures and seek independent professional advice before making any investment decisions. The writer accepts no liability for any actions taken based on this article.

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