Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>
<strong>This note is an update of <a href="https://www.smartkarma.com/entities/10709" target="_blank" data-smartkarma-citation="entities:10709:1">Hankuk Glass Ind (002000 KS)</a>, which announced that it is taking the company private on 30 July 2018 (after market close). This case is highly unusual for two main reasons.</strong> First, it is rare for a listed Korean company to take the company private. Second, the share price of Hankuk Glass has appreciated sharply, higher than the tender offer price. </li>
<li>There is one interesting angle with regards to Hankuk Glass right now, which is that the 2.4% of the minority shareholders who have yet to sell their shares may be betting on an even higher tender offer of their shares by Saint-Gobain at a later date. The remaining minority shares may be betting that Saint-Gobain may try to increase its stake of Hankuk Glass to 100%. </li>
<li>For the Korean retail investors, there is no capital gains tax on publicly listed companies but they need to pay a capital gains tax rate of 11% for private companies. Hence, if and when Hankuk Glass does become private and the Korean retail minority shareholders still own a small portion of Hankuk Glass, they will be slapped with an 11% capital gains tax when they try to unload their shares of Hankuk Glass (once they become de-listed as a public company). </li>
</ul>



This note is an update of Hankuk Glass Ind (002000 KS), which announced that it is taking the company private on 30 July 2018 (after market close). This case is highly unusual for two main reasons. First, it is rare for a listed Korean company to take the company private. Second, the share price of Hankuk Glass has appreciated sharply, higher than the tender offer price. 
There is one interesting angle with regards to Hankuk Glass right now, which is that the 2.4% of the minority shareholders who have yet to sell their shares may be betting on an even higher tender offer of their shares by Saint-Gobain at a later date. The remaining minority shares may be betting that Saint-Gobain may try to increase its stake of Hankuk Glass to 100%. 
For the Korean retail investors, there is no capital gains tax on publicly listed companies but they need to pay a capital gains tax rate of 11% for private companies. Hence, if and when Hankuk Glass does become private and the Korean retail minority shareholders still own a small portion of Hankuk Glass, they will be slapped with an 11% capital gains tax when they try to unload their shares of Hankuk Glass (once they become de-listed as a public company). 


An Update on the Unusual Case of Hankuk Glass Going Private