Institutional seller offloads $249 million worth of LG Card shares

The sale comes ahead of an expected offer by Shinhan for shares held by minority shareholders in the company.
An institutional shareholder has sold W230.3 billion ($249 million) worth of shares in LG Card about a month before Shinhan Financial Group is expected to launch a public tender for shares in the credit card issuer that are currently held by minority investors.

The transaction was completed Tuesday (February 13) at a price of W60,600 per share, which represented a 2.1% discount to the closing price of W61,900. The 3.8 million shares were offered to investors without an indicative range and people familiar with the trade say the order book was closed shortly after the deal was covered.

The offer, which was arranged by Morgan Stanley, accounted for 3% of LG CardÆs issued share capital and just under 20 days trading volume. The selling shareholder wasnÆt immediately identified, but sources said it will still hold stock in the company after the deal, which suggests it will have to disclose the transaction over the next few days.

According to one source, the deal met with good interest from Asian investors - including ôone or two Koreansö - who were keen for a chance to buy the stock at a discount in order to be able to participate in the Shinhan offer. The financial group said in a December filing to the Korean regulators that it will pay W67,770 per share to take over 85.7% of LG Card from its creditors, including a 7.1% stake that is already held by ShinhanÆs banking arm. It is widely expected that Shinhan will make an offer at the same term for the shares held by minority shareholders in March, although no definite timetable has been set.

ôGiven how the stock has traded, you can see that this is very much an M&A play,ö remarks the source.

LG CardÆs share price has traded around the W60,000 level ever since it rallied about 20% in the days leading up to the mid-August announcement that Shinhan was the winning bidder for the controlling stake, beating rival bids from Hana Financial Group and National Agricultural Cooperative Federation. It reached a 12-month high of W62,300 last Thursday.

LG Card went under in 2003 following the burst of KoreaÆs credit card bubble the year before and had to be bailed out by a creditor consortium led by Korea Development Bank. It turned profitable in 2005, earning a net profit of W1.36 trillion.
¬ Haymarket Media Limited. All rights reserved.
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