In today’s briefing:
- Detailing & Assessing SK Innovation’s Exchange Offer with SK On Shares as Consideration (10% of SO)
- Samsung SDS Placement – Well Flagged and the Last One Did Well
- Another Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes
- SK Inc: Shares Cancellation & Updated NAV Valuation
Detailing & Assessing SK Innovation’s Exchange Offer with SK On Shares as Consideration (10% of SO)
- SK Innovation will buy back its shares, worth about 10% of the total issued shares, through a tender offer and offer SK On stocks as consideration instead of cash.
- Even if there is allocation risk, as only 10% of SO are targeted, expectations that pricing discrepancy can sufficiently offset this should be the factor driving up the price today.
- Additional trading openings? This depends on the disparity widening between the intrinsic value of SK On and the exchange ratio.
Samsung SDS Placement – Well Flagged and the Last One Did Well
- Lee Seo-Hyun, via KEB Hana Bank, is looking to sell her entire stake in Samsung Sds (018260 KS) to raise US$132m.
- While a relatively large one to digest, the deal is very flagged.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
Another Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes
- After the market close today, Samsung Sds announced a block deal of 1.51 million shares at a discount range of 3.5% to 4.5% to the closing price of 117,900 won.
- Lee Seo-Hyun, the daughter of the late Samsung Chairman Lee Kun-Hee, is selling her 1.51 million shares of Samsung SDS (1.95% of oustanding shares) in a block deal.
- The company faces continued overhang on additional stake sale due to the inheritance tax issue in the next 2-3 years. As a result, we would avoid the block deal sale.
SK Inc: Shares Cancellation & Updated NAV Valuation
- On 29 March, SK Inc announced that it will cancel 0.95 million in treasury shares, which represents 1.3% of the company’s outstanding shares and 5% of treasury shares.
- One of the concerns about SK Inc in the past several weeks has been lower DPS of 5,000 won in 2022 versus DPS of 8,000 won in 2021.
- Our base case valuation of SK Inc is NAV of 19.7 trillion won (NAV per share of 266,113 won), representing a 54% upside from current levels.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
