Andaza Asset Management "SK Chemical Stock Tender Offer Price Should Be Raised to 150,000 Won"

SK Discovery and SK Chemicals Tender Offer for Over 920,000 Shares
Andaz Asset Management: "Tender Offer Price is Lower Than NAV"

[Asia Economy Reporter Hwang Yoon-joo] Anda Asset Management Co., Ltd. has argued that the public tender offer for SK Chemicals should be raised to 150,000 KRW per share.

Anda Asset Management stated, "The public tender offer price of 108,800 KRW per share by SK Discovery Co., Ltd. (SK Discovery) for SK Chemicals is too low, not even reaching 50% of the appropriate stock price of 250,000 KRW."

Earlier, SK Discovery announced a public tender offer for approximately 920,000 shares of SK Chemicals. This public tender offer by SK Discovery is evaluated as reflecting the market's voice to enhance the shareholder value of SK Chemicals, which has been undervalued due to the spin-off and listing of SK Bioscience.

Last month, through a shareholder activism campaign for SK Chemicals, Anda Asset Management claimed that SK Chemicals' stock price is extremely undervalued compared to its NAV (Net Asset Value), and requested SK Chemicals to distribute some of the SK Bioscience shares it holds as an in-kind dividend to SK Chemicals shareholders to enhance shareholder value.

Anda Asset Management stated, "As of the closing price on September 1, the value of SK Bioscience shares held by SK Chemicals is approximately 5.7 trillion KRW," adding, "The market value of SK Chemicals calculated by the NAV method is about 6.6 trillion KRW, which is 4.1 times the current market capitalization of about 1.66 trillion KRW," emphasizing, "Even considering the average discount rate of 40% for domestic holding companies, the appropriate stock price of SK Chemicals is around 250,000 KRW per share."

They pointed out, "Purchasing SK Chemicals shares at 108,800 KRW per share through the public tender offer means buying at a price discounted by more than 50% compared to the appropriate stock price of SK Chemicals."

They further stated, "The public tender offer price should be set at around 150,000 KRW, considering a discount of about 30-40% from the appropriate stock price at minimum."

Park Cheol-hong, Head of ESG Investment Division at Anda Asset Management, said, "There is a risk that the major shareholder's efforts to enhance shareholder value could be misunderstood as using the public tender offer as a loophole to increase their stake at a significantly low price," adding, "To truly achieve the purpose of enhancing shareholder value, it is appropriate to proceed by raising the public tender offer price to a level close to 150,000 KRW."

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