An undisclosed institutional investor completely divested its stake in Korea's leading cosmetics company yesterday (November 17), raising $163 million from the sale of a 6.3% stake in AmorePacific Corp. Under the lead of Credit Suisse First Boston, a 561,969 share deal was marketed on a price range of Won294,500 to Won303,800 before being priced at Won300,000, which represented a 3.23% discount to the stock's Won310,00 close.
The order book is said to have closed around the $300 million level, with participation by about 50 accounts, of which roughly half were new to the stock. By geography, about 10% of the deal went into Korea, with the remaining 90% split 80% Asia, 10% Europe and 10% US.
The transaction represents about 27 days trading volume. Pre deal, the stock had a freefloat of 58%.
At its current price, the company is trading at roughly 15 times 2006 earnings, a historical high in valuation terms. Year-to-date, it has underperformed the Kospi, rising 19.46%. However, analysts say the company has outperformed the index by about 150% since the beginning of 2003 and is now considered fully valued.
Its main comps are LG Household and Healthcare, which is currently trading at 18 times 2006 earnings, plus GS Home Shopping, which is trading around 10 times and Hyundai Department Store on 11.5 times.
AmorePacific is Korea's leading cosmetics company with a 34.4% market share at the end of 2004, ahead of LG Household and Healthcare on 7.7% and Estee Lauder 4%. About 72% of its revenues come from cosmetic products, with a further 14% from personal healthcare products and 7% from green tea.
During the 2004 Financial Year, the company recorded revenues of $1.06 billion and net profit of $145 million. Over the first nine months of iths year, the respective figures stood at $870 million and $147 million.