Asiana sale turns murky on difference in setting the pricing for existing shares

2019.11.29 15:25:15 | 2019.11.29 15:32:44

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The closure of a mega deal over the ownership change in Korean full-service carrier Asiana Airlines Inc. is being delayed after the buyer - HDC Hyundai Development-led consortium – undercut the price for existing shares held by parent Kumho Industrial.

According to industry sources on Thursday, the HDC Hyundai Development consortium has offered 320 billion won ($271 million) for existing shares representing 31.05 percent in Asiana Airlines held by Kumho Industrial. The team won the tender by offering the highest bid of over 2.4 trillion won.

The offer is equivalent to 4,660 won per share, 11.6 percent below 5,269 won, the stock’s average for this year.

Asiana Airlines started to surge on the news of sale since Apr. 14. The price before the news averaged a mere 4,128 won this year, suggesting the offer included a premium for management.

Kumho is demanding a bigger premium, while the buyer is refusing to pay higher to the existing shareholder. The two must sign an agreement by Dec. 12. Creditors have threatened earlier to find a buyer on their own if the M&A deal is not signed by the year-end.

The HDC Hyundai Development consortium recently sent a letter to urge Kumho Industrial to sincerity to the talks.

Another downside risk is stock price rise. The bidder reportedly assigned 5,500 won per a new share. A rise in stock price could reduce the stake for the consortium that already fixed its investment.

Asiana Airline shares on Friday closed 2.56 percent lower at 5,320 won.

By Han Woo-ram and Lee Ha-yeon

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