Gambling tycoon’s £1.25bn bid to take tech firm Kape private

The London stock exchange was dealt another blow after a gambling tycoon launched a billion-pound bid to take a cybersecurity firm private.

Kape Technologies has become the latest UK-listed tech company to consider leaving the UK stock exchange after receiving a £1.25billion takeover offer from Israeli billionaire Teddy Sagi.

Sagi, who also part-owns Camden Market, is aiming to buy the remaining 45 per cent stake in the AIM-listed business that he does not already own and is offering investors 285p per share in cash.

The bid values the entire company at just under £1.3billion, with the offer at a 9.7 per cent premium to Kape’s last closing price before the bid was announced.

Kape is the owner of Express VPN, a popular provider of virtual private networks, a service that allows internet users to protect their privacy and security online.

Its technology means the takeover will come under government scrutiny through the National Security and Investment Act, which allows ministers to intervene in or block deals involving sensitive industries such as defence and computer encryption.

Some of Kape’s major shareholders are also understood to be disappointed at the price of the takeover offer, which they consider too low.

But Sagi said that due to ‘thin stock market trading’, he had concluded the firm’s future should be ‘in the private arena’ and, even if the bid was rejected, he planned to table a meeting for investors to vote on removing the shares from the stock exchange.

He will need around 75 per cent of the votes to delist the firm from the market.

If the rest of shareholders agree, 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.

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.

Sagi said: ‘Having weighed the pros and cons, we are firm in our view that Kape’s next chapter in its corporate journey should be within the private arena.’

The 51-year-old already controls 54.8 per cent of Kape through his vehicle Unikmind Holdings.

He had originally approached the business with a takeover offer in early December that valued the group at 265p per share.

But this was rejected on the grounds it provided ‘insufficient value to shareholders’.

Regarding the latest proposal, Kape’s independent directors said they would write to shareholders with their views on the offer ‘in due course’ and encouraged investors to take no action.

The firm’s shares shot up 12.1 per cent, or 31.5p, to 291p following news of the bid. Sagi set up gambling software giant Playtech before his 30th birthday in 1999 and built it into an industry behemoth before cashing out entirely in 2018 to the tune of hundreds of millions of pounds.

The father of seven has an estimated net worth of £4.5billion and lives with his partner, former Miss Israel Yael Nizri.