Samsung Group Holding Company Plans IPO; Everland Listing Could Help Ownership Transition From Group Chairman to His Children

June 6, 2014 Leave a comment

Samsung Group Holding Company Plans IPO

Everland Listing Could Help Ownership Transition From Group Chairman to His Children

MIN-JEONG LEE

June 2, 2014 9:48 p.m. ET

SEOUL—Samsung Everland Inc., the de facto holding company of South Korea’s largest conglomerate, Samsung Group, is seeking an initial public offering by the first quarter of 2015 in a move that is expected to help the succession of ownership from the group chairman to his children.

Samsung Everland operates an amusement park and runs a fashion business, and serves as the holding company for various Samsung affiliates. It will pick managers for the IPO this month and plans to list its shares by the first quarter of next year at the latest, the company said. It said it plans to go public to “raise capital and expand overseas.”

The company is expected to list in Seoul, but a spokesman declined to confirm the location.

The announcement comes amid growing expectations of a speedier transition of ownership of Samsung companies from Samsung Electronics Co.005930.SE +1.99% chairman Lee Kun-hee, to his son Jay Y. Lee and daughters Lee Boo-jin and Lee Seo-hyun. The elder Mr. Lee became ill in May after a heart attack and has been hospitalized since.

Analysts say the share sale of Samsung Everland could help Jay Y. Lee secure the funds needed to take control of other Samsung affiliates as part of a transition of power.

The younger Mr. Lee, who is currently vice chairman of Samsung Electronics without an operational title, is the largest shareholder of Samsung Everland with a 25.1% stake as of the end March. The two daughters each hold an 8.37% stake in Samsung Everland, while the elder Mr. Lee has a 3.72% stake.

About two years ago, which is the most recent stock deal involving Samsung Everland shares, the company’s shares were sold at 1.82 million Korean won apiece ($1,776), which gives the company a valuation of 4.55 trillion won including treasury stock. The company has 2.5 million shares, including 380,676 treasury shares.

In early May, another Samsung affiliate, Samsung SDS Co., announced plans to go public.

The Lee family controls Samsung through a complex web of shareholdings in group companies.

Samsung Everland is the second-largest shareholder of Samsung Life InsuranceCo. 032830.SE +2.42% with a 19.34% stake after Lee Kun-hee’s 20.76% stake. Samsung Life holds a 7.56% stake in Samsung Electronics, the group’s flagship company.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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