Hahn & Co. succeeds in tender offer for SsangYong C&E
Korean private equity firm Hahn & Company succeeded in its latest tender offer bid for SsangYong C&E, the country’s leading cement maker, increasing its stake to about 93 percent.
According to the financial industry on Thursday, a total of approximately 65.5 million shares responded to the public takeover bid, which is about 65 percent of the private equity firm’s initial target.
When including Hahn & Co.’s previously held stake of 79.9 percent, the private equity firm could raise its stake up to 93 percent when the purchase settlement is completed on Friday. The acquisition price is 7,000 won ($5.26) per share, with the total cost for the tender offer amounting to 458 billion won.
Since the announcement of the tender offer bid early last month, institutional investors have flocked to purchase SsangYong C&E shares during regular trading sessions, aiming for short-term gains.
During the tender offer period, the stock price of SsangYong C&E remained slightly below the public takeover price of 7,000 won. Surging to 6,980 won on Feb. 29, hitting a 52-week high, the stock price has maintained a minimal fluctuation as it closed at 6,850 won on Thursday.
Aiming to delist the cement-making business firm without a second tender offer, Hahn & Co. is expected to continue acquiring the remaining shares held by minority shareholders for the time being to increase their stake further.
The country’s revised Commercial Act allows the largest shareholder of a company, holding more than two-thirds of the company’s shares, to take over the remaining minority shareholders’ stakes by offering cash for their shares to facilitate the squeeze-out of minority shareholders. Once the stake reaches over 95 percent, the largest shareholder can apply for delisting of the company to the Korea Exchange, the bourse operator.
The delisting of Lutronic last year followed a similar process. After Hahn and Co. secured about 90 percent of the shares through direct acquisition and a tender offer, the firm ultimately increased its stake to 96.7 percent through the cancellation of treasury stocks and additional purchases after the tender offer to apply for the company’s delisting.
Hahn and Co. acquired a partial stake in SsangYong C&E in 2012 and subsequently secured the firm’s management control by injecting additional funds in 2016. The acquisition cost 1.43 trillion won.