Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Samsung C&T Placement: Finally First Step Towards a Legit Holding Company

Smartkarma’s Week That Was in JP/​​​KR: Photo Sessions on Mt. Baektu, Samsung C&T, and Asahi Intecc

Korea Stock Market Monthly Recap #29 (September 2018)

Samsung C&T Placement - Expected Selldown Some Overhang Removed but There's Still KCC's Stake

Impact of the KCC Consortium Acquiring Momentive, the #2 Player in the Global Silicone Market

KCC's Samsung C&T Equity Block Deals May Happen Soon: It Worsens C&T Overhang Concern

Equity Capital Markets

<ul>
<li>
It was announced after market close today that <a href="https://www.smartkarma.com/entities/511" target="_blank" data-smartkarma-citation="entities:511:1">Samsung Fire &amp; Marine Ins (000810 KS)</a> and <a href="https://www.smartkarma.com/entities/539" target="_blank" data-smartkarma-citation="entities:539:1">Samsung Electro Mechanics Co, Ltd. (009150 KS)</a> (SEMCO) plan to sell their stakes in <a href="https://www.smartkarma.com/entities/481" target="_blank" data-smartkarma-citation="entities:481:1">Samsung C&amp;T (028260 KS)</a> in block deals, reducing the circular shareholding structure of the Samsung affiliates. Samsung F&amp;M plans to sell 2.61m shares (1.4%) of Samsung C&amp;T and SEMCO plans to sell 5.0m shares (2.6%) of Samsung C&amp;T. The indicative deal price is between 118,000 won to 122,000 won (5-8% discount to the last traded price of 128,500 won). </li>
<li>
We would take this deal as it further removes overhang associated with Samsung affiliates selling shares of Samsung C&amp;T and concerns about circular ownership. In addition, we like the business performance improvement of Samsung C&amp;T's core construction and trading businesses so far this year. For further details, see our report, <a href="https://www.smartkarma.com/insights/all-roads-lead-to-samsung-c-t" target="_blank" data-smartkarma-citation="insights:19326">All Roads Lead to Samsung C&amp;T</a>.
</li>
<li>Post these deals, Lee Jae-Yong and his family/relatives/related parties will own about 33% of Samsung C&amp;T. <a href="https://www.smartkarma.com/entities/11109" target="_blank" data-smartkarma-citation="entities:11109:1">Kcc Corp (002380 KS)</a> is another major shareholder with 9% stake in Samsung C&amp;T, which is worth nearly US$2.2 billion. KCC has recently made a major acquisition (see our report, <a href="https://www.smartkarma.com/insights/impact-of-the-kcc-consortium-acquiring-momentive-the-2-player-in-the-global-silicone-market" target="_blank" data-smartkarma-citation="insights:24110">Impact of the KCC Consortium Acquiring Momentive, the #2 Player in the Global Silicone Market</a>). KCC may need to sell its remaining stake in Samsung C&amp;T in the next couple of years in order to improve its balance sheet and finance its aggressive acquisition plans. </li>
</ul>



It was announced after market close today that Samsung Fire &amp; Marine Ins (000810 KS) and Samsung Electro Mechanics Co, Ltd. (009150 KS) (SEMCO) plan to sell their stakes in Samsung C&amp;T (028260 KS) in block deals, reducing the circular shareholding structure of the Samsung affiliates. Samsung F&amp;M plans to sell 2.61m shares (1.4%) of Samsung C&amp;T and SEMCO plans to sell 5.0m shares (2.6%) of Samsung C&amp;T. The indicative deal price is between 118,000 won to 122,000 won (5-8% discount to the last traded price of 128,500 won). 

We would take this deal as it further removes overhang associated with Samsung affiliates selling shares of Samsung C&amp;T and concerns about circular ownership. In addition, we like the business performance improvement of Samsung C&amp;T's core construction and trading businesses so far this year. For further details, see our report, All Roads Lead to Samsung C&amp;T.

Post these deals, Lee Jae-Yong and his family/relatives/related parties will own about 33% of Samsung C&amp;T. Kcc Corp (002380 KS) is another major shareholder with 9% stake in Samsung C&amp;T, which is worth nearly US$2.2 billion. KCC has recently made a major acquisition (see our report, Impact of the KCC Consortium Acquiring Momentive, the #2 Player in the Global Silicone Market). KCC may need to sell its remaining stake in Samsung C&amp;T in the next couple of years in order to improve its balance sheet and finance its aggressive acquisition plans. 


Samsung Fire & Marine Insurance (000810 KS)

Samsung Electro Mechanics Co, Ltd. (009150 KS)

Block Deal Sales of Samsung C&T Stakes by SEMCO and Samsung F&M