The Kina Securities Ltd (ASX: KSL) share price has slipped 4% into the red during afternoon trade on Tuesday. The company's shares are now trading at 86 cents each, down 4.44%.
Kina shares are on the move as the company advised an acquisition it was seeking in Papua New Guinea (PNG) was blocked by PNG authorities.
Let's investigate further.
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A quick rundown on Kina Securities
Kina Securities is in the financial services business and has particular interests in commercial banking. These functions include personal and commercial lending, money market functions and corporate advisory.
The group has two reportable segments: Kina Bank and Kina Wealth Management.
At the time of writing, Kina has a market capitalisation of $246 million.
What did Kina Securities announce?
In a potential blow to the Kina share price, the company advised that the PNG Independent Consumer and Competition Commission (ICCC) delivered its final decision regarding the company's play to acquire Westpac Bank-PNG-Limited.
Kina's proposal was to buy 89.91% of the shares in Westpac PNG, effectively expanding its footprint in our northern neighbour's market.
However, the PNG ICCC determined it is "not satisfied with the acquisition" on several grounds and has vetoed the deal.
Specifically, according to the company's announcement, the Commission is not satisfied that the acquisition:
- will "substantially" lessen the competition in the PNG markets; and
- will result (or will be likely to result) in "such a benefit to the public that it should be authorised".
As a result, Kina is "assessing the implications" of the ICCC's decision not to grant authorisation for the transaction to go ahead.
Investors can expect more news to come on this event, as Kina will update the market when further information surfaces.
Until then, the material impact of the ICCC's decision on the company's operations, if any, is yet to be identified.
Kina Securities share price snapshot
The Kina Securities share price has struggled this year to date, posting a loss of 4.4% since January 1.
Despite this, Kina shares are around 7% in the green over the last 12 months.
Both of these results have lagged the S&P/ASX 200 Index (ASX: XJO)'s return of around 25% over the past year.
