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

Kakao: SoTP Valuation & Cryptocurrency Exchange Optionality

SK Holdings Buyback Progress & IPO of SK Biopharm - The Next Big Catalyst

SK Networks Back Out of Woongjin Coway Deal & A Potential of IPO SK Magic to Realize Greater Value?

Equity Capital Markets

<p>On 21 October, it was announced that <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a> will issue an <a href="https://finance.naver.com/item/news_read.nhn?article_id=0003814276&amp;office_id=011&amp;code=035720&amp;page=&amp;sm=title_entity_id.basic" target="_blank" rel="noopener">exchangeable bond (EB)</a> worth 340 billion won. The company's treasury shares will be used in this EB transaction. The company plans to use the EB issue proceeds to further pursue M&amp;As.</p><p>We believe that the terms of the EB are not that attractive so we would pass on the deal. Overall, we think that the exercise price of the EB (477,225 won), which is more than 36% higher than the current price, is too high. As compared to the EB issue in May 2016 (which included only about 3% market premium), the exercise price of the EB this time has a much higher premium. </p>

On 21 October, it was announced that Kakao Corp (035720 KS) will issue an exchangeable bond (EB) worth 340 billion won. The company's treasury shares will be used in this EB transaction. The company plans to use the EB issue proceeds to further pursue M&amp;As.We believe that the terms of the EB are not that attractive so we would pass on the deal. Overall, we think that the exercise price of the EB (477,225 won), which is more than 36% higher than the current price, is too high. As compared to the EB issue in May 2016 (which included only about 3% market premium), the exercise price of the EB this time has a much higher premium. 

Kakao Corp - Exchangeable Bond Issue (Too High of an Exercise Price)?