Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

LG Uplus: A 100 Billion Won in Buyback, Bi-Annual Dividends, & A Potential Partnership with Disney

LG Uplus at 2-Yr High Relative to SK Telecom: Time to Trade

LG U+ Potential ₩300B Buyback: Tender Offer, Index Treatment, & Foreign Room Implications

Gravity Works As WeWork Doesn't; Now Plan B

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<h2>Share buyback</h2><p>LG U+ announced a well-anticipated share buyback. Well, the announcement was made earlier than initially expected. Also, the size is much smaller than ₩300B that the local street anticipated.</p><p>It is a ₩100.0B buyback, representing 1.49% of the total shares at the last closing price and 1.35% of the total equity.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Overview (₩B)"}'>Buyback overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Shares outstanding"}'>Shares outstanding</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":436611361}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">436,611,361</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares"}'>Treasury shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">3</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target qty."}'><strong>Target qty.</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6493506.493506493}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[2]C[0]"><strong>6,493,506</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'><strong>- % of SO</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.014872509223383432}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-7]C[0]"><strong>1.49%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Treasury shares after buyback"}'>Treasury shares after buyback</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6493509.493506493}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-11]C[0]+R[-8]C[0]">6,493,509</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of SO"}'>- % of SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.014872516094482693}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-15]C[0]">1.49%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total value"}'>Total value</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":100}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=sum(R[1]C[0]:R[2]C[0])">₩100.0B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Equity"}'>Equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7418.124854889}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩7,418.1B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of equity"}'>- % of equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.013480495671907417}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-6]C[0]/R[-1]C[0]">1.35%</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>Daily buyback impact</h2><p>The buyback is a year. Well, the usual period for a buyback in Korea is 3 months. But we see more and more companies do a year-long buyback of late.</p><p>The buyback begins tomorrow and runs for a year until June 8 next year. We have a daily equal-weighted buyback of 25,871 shares, representing a measly 0.89% of the 30-day average daily trade volume.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Execution"}'>Execution</td></tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Buyback begins"}'><strong>Buyback begins</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":44356}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2021. 6. 9</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Buyback ends"}'><strong>Buyback ends</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":44720}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>2022. 6. 8</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":2,"2":"KB Securities Co., Ltd."}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>KB Securities Co., Ltd.</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Method"}'>Method</td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":2,"2":"Openly in the market (no off-hours block trade)"}'>Openly in the market (no off-hours block trade)</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Number of trading days"}'>Number of trading days</td>
<td style="text-align: right; width: 352.514px;" data-sheets-numberformat='{"1":2,"2":"#,##0"}'>251</td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":"Daily equal-weighted buyback qty."}'><strong>Daily equal-weighted buyback qty.</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":25870.54379883065}' data-sheets-numberformat='{"1":2,"2":"#,##0"}' data-sheets-formula="=R[-35]C[0]/251"><strong>25,871</strong></td>
</tr>
<tr>
<td style="width: 352.5px;" data-sheets-value='{"1":2,"2":" - % of 1-month average daily trade volume"}'><strong>- % of 30-day average daily trade volume</strong></td>
<td style="text-align: right; width: 352.514px;" data-sheets-value='{"1":3,"3":0.008940932608776117}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]/googlefinance(R[-43]C[0], "volumeavg")'><strong>0.89%</strong></td>
</tr>
<tr><td colspan="2" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: DART &amp; Google Finance"}'>Source: DART &amp; Google Finance</td></tr>
</tbody>
</table>

Share buybackLG U+ announced a well-anticipated share buyback. Well, the announcement was made earlier than initially expected. Also, the size is much smaller than ₩300B that the local street anticipated.It is a ₩100.0B buyback, representing 1.49% of the total shares at the last closing price and 1.35% of the total equity.





Buyback overview

Shares outstanding
436,611,361


Treasury shares
3


Target qty.
6,493,506


- % of SO
1.49%


Treasury shares after buyback
6,493,509


- % of SO
1.49%


Total value
₩100.0B


Equity
₩7,418.1B


- % of equity
1.35%

Source: DART

Daily buyback impactThe buyback is a year. Well, the usual period for a buyback in Korea is 3 months. But we see more and more companies do a year-long buyback of late.The buyback begins tomorrow and runs for a year until June 8 next year. We have a daily equal-weighted buyback of 25,871 shares, representing a measly 0.89% of the 30-day average daily trade volume.





Execution

Buyback begins
2021. 6. 9


Buyback ends
2022. 6. 8


Banker
KB Securities Co., Ltd.


Method
Openly in the market (no off-hours block trade)


Number of trading days
251


Daily equal-weighted buyback qty.
25,871


- % of 30-day average daily trade volume
0.89%

Source: DART &amp; Google Finance



LG U+ Buyback Announcement: Details & Impacts

LG Uplus Corp

LG U+ Buyback Announcement: Details & Impacts