Samsung Life Foundation sells insurance stake

The charitable group raises $491m in accelerated block deal; the latest secondary placement offering amid Samsung Life Insurance's restructuring.

Samsung Life Public Welfare Foundation offloaded more than half of its stake in Samsung Life Insurance and raised $491 million in a block trade early on Friday morning.

The charitable institution, an affiliate of Samsung Group, sold 5 million secondary shares at W100,320 per share, a 4% discount to the June 19 close of W104,500 under the leads of Citi and Credit Suisse.

Shares were initially offered at W99,275 to W101,365 per share when books opened on Thursday night in Hong Kong, or a 3% to 5% discount to the June 19 close. The foundation initially held 9 million shares in the insurance company.

These secondary shares represent 2.5% of the company’s enlarged share capital, according to a term sheet.

Bankers told FinanceAsia they lined up two-thirds of the demand during the wall-crossing process, with hedge funds and long-only institutional investors both keen on the insurer. A total of 60 investors participated in the deal, with a 70/30 geographic split between international investors and Korean institutions.

This is Samsung Life’s third transaction in two months amid a major restructuring at the insurer as the main owner, the Lee family, transfers control of the company to the next generation.

International investor participation was higher in this morning’s block trade than the sell-off in April, largely due to the stock’s strong performance, a banker close to the deal told FinanceAsia.

Since the first of the recent deals, which saw four of Samsung Life’s shareholders — Samsung Electro-Mechanics, Samsung Fine Chemicals, Samsung SDS and Cheil Worldwide — sell 3.3 million shares at W94,944 raising $300 million on April 22, shares in the Korean insurer have risen 6%.

This helped entice more foreign investors who are keen on increasing exposure to South Korea by a low volatility stock such as Samsung Life.

“People are a lot more bullish on [Samsung’s] restructuring story now,” one banker said.

In the April 22 deal, only 50% of the participants came from abroad compared to  the 70%  in Friday’s sell-off, bankers said.

Year-to-date, shares are up 3%, with the company trading at 19.75 times forward 2014 earnings.

Samsung Life is still trading below its debut price of W110,000 per share, after raising W4.89 trillion in April 2010, in what was Korea’s largest initial public offering.

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