Celltrion rebounds after plunge on block deal as shares end up with NPS

2018.03.08 15:19:09 | 2018.03.08 15:49:25

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Korea’s bio bellwether Celltrion bounced back on Thursday after a plunge in the previous session upon news that major pension funds had been the primary buyers in a block deal by the company’s second largest stakeholder Temasek Holdings.

The Kospi-listed stock finished Thursday 8.9 percent up at 354,000 won, and its Kosdaq-listed sister company Celltrion Healthcare 3.3 higher at 108,700 won.

The company disclosed on Tuesday that Ion Investments, a unit of the Singaporean sovereign wealth fund, was selling a part of its stake in Celltrion and its distribution unit Celltrion Healthcare in a block deal worth about 1.1 trillion won ($1.03 billion).

The deal represented a discount of 6 to 9 percent from Tuesday’s closing stock prices of Celltrion and Celltrion Healthcare.

The news led to a sharp drop of Celltrion and Celltrion Healthcare shares by more than 10 percent in the following day. Celltrion closed the Wednesday session 12.16 percent or 45,000 won lower to 325,000 won, the biggest one-day decline this year. Celltrion Healthcare lost 11.89 percent. Foreign investors drove the sell-off, dumping 504 billion won worth of Celltrion shares and 177.7 billion won worth of Celltrion Healthcare shares. As a result, the combined market cap of Celltrion companies dropped around 7.7 trillion won in a day.

Foreign investors continued their selloff for five straight sessions on negative analyst reports and the block deal.

According to sources, Ion Investments sold 2.24 million shares (1.8 percent) in Celltrion for 336,700 won and 2.9 million shares (2.1 percent) in distribution unit Celltrion Healthcare for 108,654 won to institutional investors, including South Korea’s national pension fund.

Confidence was raised upon news that the shares ended up in the hands of institutional players that usually go long on equity investment.

Following the deal, Temasek still holds a 12.44 percent stake in Celltrion, retaining its position as Celltrion’s second-largest shareholder after Celltrion Holdings. In Celltrion Healthcare, Temasek owns a 10.4 percent stake, making it the third-largest shareholder after Celltrion’s founding chairman Seo Jung-jin and JP Morgan-owned One Equity Partners.

Amid investor concerns over Temasek’s move, Celltrion released a statement Wednesday, saying that the fund had clarified the purpose of the sale was to rebalance its investment portfolio and that its position as a long-time investor in Celltrion and Celltrion Healthcare remains unchanged.

By Park Yoon-gu and Minu Kim

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