Four of Samsung Life Insurance's shareholders raised 311.9 billion won ($300 million) via an accelerated secondary share offering late Tuesday in Hong Kong. Samsung Electro-Mechanics, Samsung Fine Chemicals, Samsung SDS and Cheil Worldwide sold 3.3 million secondary shares, or 1.64% of the existing share capital.
The shares were priced at 94,944 won, towards the bottom end of a 94,000 won to 96,500 won indicative price range. This represents a 4% discount to the April 22 closing price of 98,900 won.
There is no lock-up, according to a term sheet.
Books were closed about two hours after launch with participation from 50 investors. There was roughly a 50/50 split between international and South Korean accounts.
The top three investors were allocated about 50% of the deal, equating to roughly 20 days trading volume. They were said to be long-only macro players -- keen to gain exposure to South Korea with a low volatility stock like Samsung Life.
The company’s shares are down 2% so far this year, dropping 0.7% yesterday. In contrast, the Kospi Index of leading South Korean shares is 2% up year-to-date, closing Tuesday at 2,004.
At current levels, Samsung Life is trading at 0.77 times embedded value based on 2014 forecasts. This places it at a premium to comparable South Korean insurance firms such as Hanwha Life and Hyundai Fire and Marine.
The former is trading at roughly 0.59 times 2014 embedded value, with shares down 5.5% year-to-date, while the latter is trading at 0.52 times embedded value, with shares down roughly 10% over the same period.
Samsung Life is still trading below its debut price of 110,000 won per share after raising 4.89 trillion won via South Korea’s largest-ever intial public offering of shares in April 2010. At that point it was valued at about 1.32 times embedded value.
The current deal appears well timed as foreign investors were net buyers of South Korean stocks in the previous six trading sessions in contrast to other regional markets such as Hong Kong where sentiment has been hit by China growth fears.
Citi and Credit Suisse acted as joint bookrunners on the deal.
