A Tender Offer to Purchase a 17.5% Stake in Hanwha Galleria (Operator of Five Guys in Korea) by Kim Dong-Sun

• It was announced that a tender offer to purchase a 17.54% stake in Hanwha Galleria has been launched by Kim Dong-Sun (Vice President at Hanwha Galleria).

• Tender offer price is 1,600 won per share, which is 22.8% higher than the closing price on 22 August. Tender offer amount is 54.4 billion won.

• On 23 August, Hanwha Galleria's share price is likely to rise close to the tender offer price as many investors believe the tender offer is likely to be successful.

Photo by Ahmad Qime on Unsplash

After the market close on 22 August, it was announced that a tender offer to purchase a 17.54% stake in Hanwha Galleria (452260 KS) has been launched by Kim Dong-Sun (Vice President at Hanwha Galleria, third son of Hanwha Group Chairman Kim Seung-Yeon). This tender offer involves 34 million shares of Hanwha Galleria (17.54% stake).

Tender offer price is 1,600 won per share, which is 22.8% higher than the closing price on 22 August. Tender offer amount is 54.4 billion won. The tender offer is expected to take place from 23 August to 11 September. NH Investment & Securities is the lead banker on this deal.

This tender offer is a move by Vice President Kim Dong-Sun to solidify his control of Hanwha Galleria as the largest individual shareholder. After the completion of the tender offer, Kim Dong-Sun's stake in Hanwha Galleria will increase to 19.86% stake. Currently, he owns a 2.32% stake in the company. As of end of June 2024, Kim Dong-Sun and related parties owned a combined 40.17% stake in the company. Currently, Hanwha Corp is the largest shareholder in Hanwha Galleria with a 36.31% stake.

In order to raise 54.4 billion won, Kim Dong-Sun may use his 25% stake in Hanwha Energy as collateral. Hanwha Energy is a company whose shares are divided among the three brothers of Hanwha Group.

On 23 August, we believe Hanwha Galleria's share price is likely to rise close to the tender offer price of 1,600 won as many investors believe that the tender offer is likely to be successful.