Hanmi Science: If Talks With Mum and Sister Break Down, Then KKR May Provide a Partial Tender Offer

• The 2024 AGM of Hanmi Science is over and the two Lim brothers have control of the company. Nonetheless, the fight for the control of Hanmi Science is not over.

• There is an increasingly probable scenario where the KKR private equity firm gets involved, joining hands with the Lim brothers.

• If mum and sister do not sell their shares (which seems to be the higher likely scenario), then KKR may issue a tender offer to the remaining minority shareholders.

The 2024 AGM of Hanmi Science (008930 KS) is over and the two Lim brothers have control of the company for now. At this AGM, the two Lim brothers were approved as board members of Hanmi Science. Nonetheless, the fight for the control of Hanmi Science is not over and there is an increasingly probable scenario where the KKR private equity firm gets involved, joining hands with the Lim brothers. If KKR becomes the largest shareholder in Hanmi Science, it would have an overall control of the company, although the Lim brothers would continue to have the rights to manage the holding company.

Apparently, the two Lim brothers and KKR are in final negotiations to secure a combined 51% or more stake in Hanmi Science. Such a scenario would involve KKR purchasing a significant stake in the company. Local media have mentioned that KKR is in the final stages of purchasing 12.15% stake in Hanmi Science which is currently owned by Shin Dong-Guk (Chairman of Hanyang Precision) along with additional 3% stake owned by the Lim brothers' cousins.

Furthermore, KKR could buy more shares from the Lim brothers, who need funds to pay for their remaining inheritance taxes that are about 90 billion won. It is estimated that the two Lim brothers and their family members and affiliated entities have a combined stakes of 28.4% stake in Hanmi Science as of end of March 2024.

KKR is also in discussions with Hanmi Science Chairwoman Song Young-Sook (mum) and her daughter Lim Ju-Hyun to purchase additional stakes from them. The remaining inheritance taxes that Song Young-Sook and Lim Ju-Hyun need to pay is estimated to be nearly 170 billion won. If mum and sister do not sell their shares (which seems to be the higher likely scenario), then KKR may issue a tender offer to the remaining minority shareholders who are estimated to own about 16% of the outstanding shares. Foreigners owned only a 2.3% stake in Hanmi Science as of 5 April 2024, up from 1.7% as of end of 2023.