Kim Dong-sun expands Hanwha M&S tender offer to 26.2 million shares, citing accountability

Hanwha Machinery & Services Holdings (Hanwha M&S) said Thursday that Kim Dong-sun, its president of future strategy, would significantly expand his tender offer for the company's common shares.

According to an amended disclosure filed with the Financial Supervisory Service's DART system that day, Kim raised the number of shares targeted in the tender offer — originally announced Monday — from 16.06 million to 26.203 million shares.

The expanded offer represents about 31 percent of all common shares outstanding, up from the original 19 percent. The purchase price of 8,000 won per share and the offer period, which runs through Nov. 2, remain unchanged.

With the larger volume, the personal funds Kim will commit to the tender offer will grow from 128.5 billion won ($96.9 million) to about 210 billion won. The decision came after related parties — including Hanwha Group Senior Vice Chairman Kim Dong-kwan and Hanwha Life Insurance Vice Chairman Kim Dong-won — indicated they intended to subscribe to the offer.

Kim Dong-kwan said he plans to subscribe for about 6.76 million shares, or 8 percent, while Kim Dong-won indicated he would take 3.38 million shares, or 4 percent. Together, those subscriptions would account for 63.2 percent of the original tender offer volume.

"Concerns were raised that retail minority shareholders wishing to participate in the tender offer could see their opportunity curtailed, which led Kim to substantially increase the volume," a Hanwha M&S official said. "This was a decision made to honor the spirit of the tender offer — giving all shareholders an equal opportunity to sell their shares on the same terms."

Kim had announced the tender offer at Hanwha M&S's first shareholders' meeting last month, after investors raised concerns about a prolonged decline in the share price and the company's growth prospects, framing the move as an act of responsible management.

The offer price of 8,000 won represents a 27 percent premium over the one-month average price of 6,300 won as of the announcement date Monday, and a 32 percent premium over the closing price of 6,080 won on the previous trading day — both above market norms.

The market has responded positively. Since the disclosure Monday, Hanwha M&S shares have risen 22.37 percent.

Hanwha M&S posted the highest gain among KOSPI 200 constituents so far this month, rising 30.3 percent through Wednesday, even as the KOSPI 200 index fell 17.64 percent over the same period.

"This additional purchase by Kim broadly expands the opportunity for ordinary shareholders to sell, while further reinforcing the commitment to responsible management and the willingness to listen to shareholders that motivated this tender offer from the start," the Hanwha M&S official said. "We will continue to put forward a range of measures to enhance shareholder and corporate value."