Temasek cashed out part of its investment in South Korean biopharmaceutical firm Celltrion and its affiliate Celltrion Healthcare for a combined W1.07 trillion ($994 million) on Tuesday, as the Singaporean sovereign wealth fund continues to reshape its portfolio to address long-term opportunities.
In a rare deal that involved two listed companies, Temasek reaped $701 million from the sale of a 1.8% interest in Celltrion and $293 million from another 2.1% stake in Celltrion Healthcare. The latter is the biosimilar unit of Celltrion that listed on the Kosdaq market in July last year.
The divestment, made through Temasek's subsidiary Ion Investments, was conducted at a time when shares in both companies are hitting record levels.
For Celltrion, the deal was priced off its Tuesday close of W370,000, which was just 5.6% shy of its W392,000 all-time high. Meanwhile, the sale in Celltrion Healthcare was referenced to its W119,400 Tuesday close, a staggering 290% increase from its IPO price of W41,000 just eight months ago.
The stake sale was structured as an accelerated bookbuild on Tuesday night, in which Temasek sold 2.24 million shares in Celltrion at W336,700 per share and 2.9 million shares in Celltrion Healthcare for W108,654 per share. Both deals were priced at the bottom of their respective 6% to 9% discount range.
One source familiar with the situation said the two deals were executed together to reflect Temasek’s overall strategy towards the entire group, but not any specific business unit.
Temasek has been a shareholder in Celltrion since 2010, and Celltrion Healthcare since 2011.
Tuesday’s divestment was chunky by size, but has little impact on Temasek’s shareholding relationship with Celltrion because the stakes accounted for less than one-fifth of each of the companies.
It remains Celltrion’s second-biggest shareholder with a 12.4% stake and the third-largest in Celltrion Healthcare with 10.5%.
Temasek has agreed to a 180-day lock-up for its remaining shares in the two companies.
With a residual stake of about $6.4 billion, Celltrion remains Temasek’s biggest investment in the life science sector. The sovereign wealth fund owns $1 billion worth of shares in Nasdaq-listed Gilead Sciences and $600 million in New York-listed Thermo Fisher Scientific.
Temasek’s trade is the biggest equity deal out of Korea this year behind Kakao’s $1 billion sale of Global Depositary Receipt in January.
Citigroup and Goldman Sachs were joint bookrunners of the block trade.
Tuesday’s deal marked the second major divestment for Temasek over the past three months. The sovereign wealth fund announced in December it will sell its entire 73.8% stake in Indonesia’s Bank Danamon to Japan’s Mitsubishi UFJ Financial Group.
These divestments were made after when Temasek amassed a record S$275 billion ($209 billion) worth of assets as of the end of March last year. The fund has been on a buying spree in recent years, including snapping up a quarter of AS Watson for $6 billion in 2014 and taking SMRT private for $900 million in 2016.
The fund has made it clear it will reshape its investment portfolio to reflect long-term opportunities, particularly in technology, life sciences, agribusiness, non-bank financial services, consumer, and energy and resources.
