BNP Paribas launches block deal for 3.6 % stake in Shinhan

2024.03.27 09:55:01 | 2024.03.27 09:58:34

[Photo by MK DB]이미지 확대

[Photo by MK DB]

French investment bank BNP Paribas began the sale of its stake in South Korea’s Shinhan Financial Group Co. The move is understood to be aimed at ending the close relationship between the two companies, as indicated by the dissolution of the duo’s joint venture Shinhan BNP Paribas Asset Management in 2021.

According to industry sources on Tuesday, BNP Paribas launched a block deal for its entire 3.6 percent stake, or 18.7 million shares, in Korea’s second-largest banking group targeting institutional investors shortly after the market closed on that day.

The total transaction amount is approximately 900 billion won ($669.59 million), and the discount rate offered by the selling agent for the per-share sale ranges from 2 percent, or 47,300 won, to 4.9 percent, or 49,700 won compared to the closing price of 49,750 won on the day. BNP Paribas is the selling agent.

Shinhan Financial Group and BNP Paribas have been partners since 2002, when Shinhan sold its 50 percent stake minus a share in its asset management arm to BNP Paribas for 23.8 billion won to form a joint venture, Shinhan BNP Paribas Asset Management.

But BNP Paribas‘ ownership at the joint venture was reduced to 35 percent after it merged with sister company SH Asset Management in 2009. The joint venture was eventually liquidated in 2021 when BNP Paribas sold its entire stake in Shinhan BNP Paribas Asset Management back to Shinhan Financial Group.

BNP Paribas received more than 100 billion won in dividends and other payments from the joint venture.

In this regard, some industry insiders say that BNP Paribas is trying to realize profits as the stock prices of financial stocks, which are representative of low price-to-book ratio (PBR) stocks, have risen recently amid expectations that the Korean government will introduce a corporate value-up program.

By Jeon Hyeong-min and Yoon Yeon-hae

[ⓒ Pulse by Maeil Business Newspaper &, All rights reserved]