Tender Offer of 25% of Hyundai Home Shopping Shares by Hyundai GF Holdings

• On 3 April, it was reported that Hyundai G.F. Holdings will be conducting a tender offer of 3 million shares of Hyundai Home Shopping (25% of outstanding shares).

• The tender offer price is 64,200 won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025.

• We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings.

Conclusion First

We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings. Hyundai Home Shopping's share price rose by 13.8% to 60,800 won today. The tender offer price is 64,200 won, which is 5.6% higher than current price. We expect Hyundai Home Shopping's share price to reach closer to the tender offer price leading up to the end of the tender offer period.

Although low sales growth of the TV home shopping remains a key risk of Hyundai Home Shopping, it is trading at only 0.3x P/B and net cash is 124% of market cap. Furthermore, the expansion of the Korea Corporate Value Up program will help deep value companies such as Hyundai Home Shopping to receive higher valuations.

The company's dividend yield has also been rising in the past several years. Its dividend yield reached 6.5% in 2023. The tender offer will also help to reduce the overall free float which should be positive on its share price.

Tender Offer Details - On 3 April, it was reported that Hyundai G.F. Holdings (005440 KS) will be conducting a tender offer of 3 million shares of Hyundai Home Shopping Network (057050 KS) (25% of outstanding shares).

The total amount of this tender offer is 192.6 billion won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025. Currently, Hyundai Home Shopping's share price is 60,900 won, up 13.8% from the previous day. The tender offer period is from 3 to 22 April.