Hanwha "Hanwha Energy, Hanwha Co. Tender Offer Legal... No Possibility of Shareholder Interest Infringement"

Hanwha Group has rebutted the Korea Corporate Governance Forum's (Governance Forum) criticism that Hanwha Energy's public tender offer for common shares of Hanwha Corporation infringes on the interests of common shareholders, stating that "the process is being conducted fairly and legally, and there is absolutely no possibility of infringing on the interests of common shareholders."

On the 11th, Hanwha stated in a press release, "This public tender offer is being conducted with the purpose of enhancing the overall governance stability and transparency of Hanwha Group, strengthening responsible management as a major shareholder of Hanwha Corporation, and ultimately increasing shareholder value of Hanwha Corporation."

Hanwha Energy will launch a public tender offer from the 5th to the 24th of this month to purchase 6 million common shares of Hanwha Corporation (8.0% stake) from existing shareholders. The tender offer price was set at 30,000 KRW, which is a 12.9% premium compared to the average stock price over the past month and a 7.7% premium compared to the closing price on the day before the tender offer started, the 4th. If Hanwha Energy purchases all these shares, Hanwha Corporation's stake will increase from the current 9.7% to 17.7%, making it the second-largest shareholder of Hanwha Corporation after Chairman Kim Seung-yeon of Hanwha Group. Hanwha Energy is 100% owned by Chairman Kim's three sons.

The Governance Forum questioned, "Common shareholders of Hanwha Corporation, who have suffered from extremely low stock performance over a long period, cannot understand why they should sell their shares to the controlling shareholder here," and asked, "Shouldn't the financial authorities regulate this through at least rejecting the filing, given the unplanned and vague disclosure?" As of the 4th of this month, Hanwha Corporation's total shareholder return (TSR) was 0% over the past 3 years, 1% over 5 years, and 3% over 10 years. According to the Korea Exchange, Hanwha Corporation's price-to-book ratio (PBR) is around 0.26, close to the tender offer price of 30,000 KRW.

Hanwha rebutted in its statement, "Common shareholders can decide whether to participate by judging the appropriateness of the tender offer price," and added, "Even if they do not participate in the tender offer, they can freely trade in the market and will not be placed at a disadvantage."

Hanwha also emphasized that this tender offer does not constitute a self-dealing transaction by directors. Hanwha explained, "Hanwha Energy's public tender offer for Hanwha Corporation shares was decided independently by Hanwha Energy's board of directors," and "Hanwha Corporation's directors were not involved at all in Hanwha Energy's tender offer decision."

Furthermore, Hanwha stated, "Regulations on self-dealing by directors apply when a director or a company controlled by a director transacts with the company," and "They do not apply in cases like this tender offer, where shares are purchased from unspecified shareholders on the open market."

This content was produced with the assistance of AI translation services.