Kim Dong-sun, president in charge of future strategy at Hanwha Machinery & Service Holdings (0220W0), said on the 22nd that he will tender for an additional 10.14 million common shares in the company, also known as Hanwha M&S. Kim is the third son in the family that controls Hanwha Group.
The move raises the total tender offer volume to 26.203 million shares from 16.06 million, or about 31% of all outstanding shares. The offer price remains unchanged at 8,000 won per share, a 27% premium to the average price of about 6,300 won as of Oct. 12, when the first tender offer was announced. The offer period runs through Nov. 2. With the larger volume, Kim is expected to commit about 210 billion won ($146 million) of his personal funds to the purchase.
Kim decided on the additional tender after Kim Dong-kwan, Hanwha Group vice chairman and the eldest son, said he would tender 6.762 million shares, or 8%, and Kim Dong-won, vice chairman of Hanwha Life Insurance and the second son, said he would tender 3.381 million shares, or 4%. Those commitments accounted for 63.2% of the original tender volume, raising concerns that participation by minority shareholders would be sharply limited.
A Hanwha M&S official said Kim substantially expanded the tender volume after concerns were raised that minority shareholders wishing to participate could have their right to do so impaired. The decision was made to live up to the purpose of a tender offer, which is to give all shareholders an equal opportunity to sell their holdings on the same terms, the official said.
Hanwha M&S said Kim decided on the tender offer as a matter of management accountability after shareholders raised concerns at the company's first general meeting last month about the continued decline in the share price and the company's future growth prospects.
The official said Kim's additional purchase broadly guarantees selling opportunities for ordinary shareholders while further strengthening the acceptance of shareholder voices and the commitment to accountable management that prompted the tender offer in the first place. The company will continue to present various measures to enhance shareholder value and corporate value, the official said.
Hanwha M&S, the holding company for Hanwha Group's tech and life divisions, was established in August this year through a spin-off of those businesses and listed on the main KOSPI board the same month. The tech division comprises Hanwha Vision, Hanwha Semitech, Hanwha Momentum and Hanwha Robotics, while the life division includes Hanwha Galleria, Hanwha Hotels & Resorts and Ourhome.