Hana Tour Service: Major Shareholders Including IMM PE Likely to Sell Their Shares

• Hana Tour Service (039130 KS), the number one travel platform in Korea, announced that IMM PE (controlling shareholder of the company) is planning to sell its controlling stake.

• The total stake in the company that is up for sale could rise to 27.78%, including stakes held by Hana Tour founder Park Sang-hwan and co-founder Kwon Hee-seok.

• Potential buyers of the controlling stake in Hana Tour include Yanolja, Hotels.com, Booking.com, and Trip.com.

Hana Tour Service (039130 KS), the number one travel platform in Korea, announced that IMM PE (controlling shareholder of the company) is planning to sell its controlling stake. IMM PE currently has a 16.68% stake in Hana Tour Service. It has been about four years since IMM PE took over the management rights of Hana Tour. It is in the early stages of selling its stake in the company.

Depending on demand, the total stake in the company that is up for sale could rise to 27.78%. In addition to the 16.68% stake owned by IMM PE, other related parties stakes including Hana Tour founder and Chairman Park Sang-hwan (6.53%) along with co-founder Vice Chairman Kwon Hee-seok (4.48%) could also be sold.

Given the strong improvement in sales and profits along with reasonable valuations, excellent brand, and the company's number one position in the local travel platform sector, we believe there will be numerous strategic investors that would be interested in buying a controlling stake in Hana Tour Service.

However, given the fact that the 50%+1 rule for M&As in Korea has yet to be mandated, there may not be any management premium benefits to the minority shareholders. This would be the downside of Hana Tour's potential sale of controlling stake.

Other major shareholders include NPS (5.39%) and foreign investors (11%). Previously, IMM PE participated in Hanatour's third-party capital increase and became the largest shareholder at the end of 2019, just before the travel industry was hit hard by COVID-19. It spent 128.9 billion won to purchase 2.323 million shares at 55,500 won per share. Current share price of Hana Tour is 70,200 won.

Potential Buyers - Potential buyers of the controlling stake in Hana Tour include Yanolja, Hotels.com, Booking.com, and Trip.com.