Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. </li>
<li>At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. </li>
<li>Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. </li>
</ul>


We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of shares to be completed this year. 
At current blistering pace, it is likely that the share cancellations in Korea could jump at least 100% YoY to jump more than 10 trillion won in 2024. 
Some of the leading Korean companies including Samsung C&amp;T and KT&amp;G that have announced share cancellations this year continue to outperform the market on average. 


Korea: Surging Share Cancellations in 2024

<ul>
<li>After market close on 15 December, MBK Partners raised the tender offer price of Hankook &amp; Company by 20% to 24,000 won, which is now 51.4% higher than current price. </li>
<li>With Cho Yang-Rae's recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook &amp; Co, up from 42.9% previously. </li>
<li>MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook &amp; Co.</li>
</ul>


After market close on 15 December, MBK Partners raised the tender offer price of Hankook &amp; Company by 20% to 24,000 won, which is now 51.4% higher than current price. 
With Cho Yang-Rae's recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook &amp; Co, up from 42.9% previously. 
MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook &amp; Co.


MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>With the price almost 10% above ₩20,000, it's practically fair to regard MBK's tender offer as effectively canceled, raising the question of the proxy battle's potential continuation.</li>
<li>There is a significant likelihood that MBK has prepared a next-phase plan involving an upward adjustment of the offering price, considering the tight situation of successfully securing the target volume.</li>
<li>Essentially, there's a high likelihood that the situation will resemble the earlier battle between HYBE and Kakao Corp over S.M. Entertainment Co at the start of this year.</li>
</ul>


With the price almost 10% above ₩20,000, it's practically fair to regard MBK's tender offer as effectively canceled, raising the question of the proxy battle's potential continuation.
There is a significant likelihood that MBK has prepared a next-phase plan involving an upward adjustment of the offering price, considering the tight situation of successfully securing the target volume.
Essentially, there's a high likelihood that the situation will resemble the earlier battle between HYBE and Kakao Corp over S.M. Entertainment Co at the start of this year.


Navigating the Potential of Hankook & Company's Revised Tender Offer

<ul>
<li>After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE which represents 569 billion won in amount at current price. </li>
<li>The actual block deal amount is likely to be less than 569 billion won as there will likely be a  block deal discount rate. </li>
<li>We would avoid this deal, mainly because we think HYBE is overvalued relative to its peers. </li>
</ul>


After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE which represents 569 billion won in amount at current price. 
The actual block deal amount is likely to be less than 569 billion won as there will likely be a  block deal discount rate. 
We would avoid this deal, mainly because we think HYBE is overvalued relative to its peers. 


<ul>
<li>On 25 October, Eoflow announced that the M&amp;A of Eoflow by Medtronic has been postponed. </li>
<li>The closing date for Eoflow's stock transfer agreement with Medtronic has now been changed to 3 January 2024. </li>
<li>Although we believe Medtronic will continue to pursue Eoflow, the M&amp;A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.</li>
</ul>


On 25 October, Eoflow announced that the M&amp;A of Eoflow by Medtronic has been postponed. 
The closing date for Eoflow's stock transfer agreement with Medtronic has now been changed to 3 January 2024. 
Although we believe Medtronic will continue to pursue Eoflow, the M&amp;A tender offer price could be lowered to about 26,000 won, which would be nearly 20% higher than current price.


Medtronic's M&A of Eoflow Timeline Postponed

South Korea

S.M.Entertainment Co. plans, produces, promotes, and markets Korean rock and roll music in several formats, such as compact discs (CD), concert tours, television productions, and music videos.  The Company also operates artist management business as well as licensing and copyright business from the company's music records.

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S.M.Entertainment Co (041510 KS)

MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won

MBK Partners raised the tender offer price of Hankook & Company by 20% to 24,000 won, which is now 51.4% higher than current price.

Douglas Kim

Navigating the Potential of Hankook & Company's Revised Tender Offer

This post navigates the potential of a revised tender offer by MBK to Hankook & Company's shareholders, focusing on trading considerations.

Sanghyun Park

Block Deal Sale of HYBE by Netmarble

After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE. We would avoid this deal, mainly because we...

Douglas Kim

Medtronic's M&A of Eoflow Timeline Postponed

The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...

Douglas Kim

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Korea: Surging Share Cancellations in 2024

We discuss the surging share cancellations in Korea in 2024. As of 8 February 2024, Korean companies have announced 3.3 trillion won worth of...

Douglas Kim

MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won

MBK Partners raised the tender offer price of Hankook & Company by 20% to 24,000 won, which is now 51.4% higher than current price.

Douglas Kim

Navigating the Potential of Hankook & Company's Revised Tender Offer

This post navigates the potential of a revised tender offer by MBK to Hankook & Company's shareholders, focusing on trading considerations.

Sanghyun Park

Block Deal Sale of HYBE by Netmarble

After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE. We would avoid this deal, mainly because we...

Douglas Kim

Medtronic's M&A of Eoflow Timeline Postponed

​The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...

Douglas Kim

The M&A between Eoflow and Medtronic has been postponed, with a new closing date set for January 3, 2024. The tender offer price may be lowered to...