Shares of Kosdaq-listed biotechnology company ChunLab Inc. jumped to daily ceiling Thursday upon confirming equity investment from CJ CheilJadang Corp. to make the food giant its largest stakeholder.
ChunLab shares rallied by daily permissible limit of 30 percent to end the day at 64,200 won ($55.73) after closing the previous session 9.90 percent higher at 49,400 won. The stock price has soared 61.3 percent since speculation of an M&A on July 16.
According to its disclosure on Wednesday, ChunLab signed a deal to sell a 15.99 percent stake – 10 percent owned by its founder and CEO Chung Jong-sik and 5.99 percent held by Shanghai ZJ Bio-Tech Co. – to CJ CheilJedang for 25 billion won.
It also is planning to issue new shares worth 73.24 billion won to CJ CheilJadang. Combined with the new issues, CJ CheilJedang’s holding in the company increases to the largest 43.99 percent.
The acquisition is part of the food conglomerate’s efforts to expand functional food business for future growth, hoping that its microorganism and fermentation technology and ChunLab’s prowess in microbiome analysis and big data can create great synergy, said CJ CheilJedang.
ChunLab, founded in 2009, is a Korea-based biotechnology company specializing in studies of microbiome. Human microbiome refers to the complete set of genes contained in the entire collection of microorganisms in the human body.
By Lee Ha-yeon
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