Hanwha founder's third son launches W128.5b tender offer, shares surge 20%

Kim Dong-sun, the third son of Hanwha Group Chairman Kim Seung-youn and president of Hanwha Machinery & Services Holdings (Hanwha M&S), has launched a tender offer using approximately 128.5 billion won ($96 million) of his personal funds. The bid targets up to 19 percent of the company's issued shares at a price 31.6 percent above the previous session's closing price. The move follows the August spin-off of the tech and life businesses into a separate holding company and signals his push to cement independent management and lift corporate value.

Hanwha M&S shares were trading up 22.86 percent at 7,470 won as of 10 a.m. Monday, according to Korea Exchange. The stock climbed as high as 7,710 won in early trading — a 26.81 percent surge — approaching the tender offer price of 8,000 won per share. That offer price represents a 31.58 percent premium over the previous session's closing price of 6,080 won.

Kim will conduct the tender offer from Monday through Nov. 2, seeking to buy up to 16.06 million common shares of Hanwha M&S at 8,000 won per share. The targeted volume represents 19 percent of total issued shares, with the maximum total purchase price reaching 128.48 billion won. The funds will come entirely from Kim's personal assets.

The core objective of the tender offer is to expand Kim's stake and strengthen management accountability. If completed as planned, his ownership would rise from 5.81 percent to 24.81 percent, surpassing the 23.94 percent held by Hanwha Energy — the current largest shareholder — and making Kim the single largest shareholder. His total stake including related parties would also increase from 60.32 percent to 79.32 percent.

Hanwha M&S said the tender offer was intended to enhance shareholder value and reinforce management accountability. At the company's first extraordinary general meeting last month, shareholders raised concerns about the falling share price and future growth prospects. The tender offer is designed to give shareholders the opportunity to sell their shares at above-market prices while demonstrating management's commitment to growth.

Hanwha M&S was established in August through a spin-off of the tech and life divisions from Hanwha Corp. The tech division includes Hanwha Vision, Hanwha Semitech, Hanwha Momentum and Hanwha Robotics, while the life division comprises Hanwha Galleria, Hanwha Hotels & Resorts and Ourhome. The company plans to deepen expertise in each business area while pursuing new ventures through inter-affiliate collaboration to strengthen its growth foundation.

"The growth potential of Hanwha Group's tech and life divisions has not been fully reflected in the share price," a Hanwha M&S official said. "We hope this tender offer sends a positive signal to the market and shareholders, and serves as a catalyst for enhancing both shareholder value and corporate value."