Kaival Brands Stock Surges As E-Cigarettes Maker Puts To Vote Merger, Sparks Retail Chatter

Kaival stockholders will receive about $31 million of Pubco ordinary shares and Delta stockholders will receive about $270 million worth of Pubco shares.

Shares of Kaival Brands Innovation Group ($KAVL) rose 15% on Wednesday as the nicotine products maker called for a special meeting of its stockholders to vote on its proposed merger with Delta Corp Holdings Ltd, sparking retail chatter on Stocktwits.

Message volumes spiked nearly 3,075% on Wednesday compared to a day ago with retail sentiment remaining largely bullish.  

In September, Kaival entered into a merger agreement with Delta that will combine Kaival and Delta and become wholly owned subsidiaries of Pubco, which according to the company’s earlier statement, would become a new publicly listed holding company and list shares on Nasdaq.

Under the terms of the agreement, Kaival stockholders will receive about $31 million of Pubco ordinary shares and Delta stockholders will receive about $270 million of Pubco shares, at an estimated implied diluted value per share of $2.66, according to a filing with the Securities and Exchange Commission.

Each of Kaival’s issued and outstanding shares of Series B preferred stock, par value $0.001 per share, shall convert into shares of Kaival common stock at the conversion rate of approximately 0.4 shares of Kaival common stock per share of Series B preferred stock, according to the filing. The board of Kaival has approved the business combination.

One Stocktwits user was enthusiastic about an opportunity to trade in the pre-market.

Kaival is engaged in the sale, marketing, and distribution of electronic nicotine products including its flagship ‘Bidi’ stick. Delta Corp, based in England and Wales, is a privately held holding company for global businesses engaged in bulk and energy logistics, fuel supply, commodities, and asset management.

Kaival stock is 3% year-to-date.

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