Samsung Biologics' W2.7tr rights offering draws nearly 97% subscription rate

Samsung Biologics has cleared the final hurdle in its 2.7 trillion won ($2.01 billion) rights offering, drawing a subscription rate of nearly 97% and securing the bulk of its fundraising target.

Despite a per-share issue price exceeding 1 million won and a second union strike adding to uncertainty, existing shareholders and employees turned out in force — a sign that investors are betting on the company's long-term growth prospects over near-term risks.

According to filings with the Financial Supervisory Service's DART system Wednesday, Samsung Biologics received subscriptions for 2,198,146 of the 2.27 million shares on offer during the two-day subscription window that ran Monday through Tuesday, for an overall subscription rate of 96.83%.

Breaking down the results by category, existing shareholders holding preemptive rights subscribed for 1,792,716 shares — including oversubscriptions — out of an allotment of 1,816,000 shares, for a subscription rate of 98.7%.

Major shareholders Samsung C&T, with 782,818 shares, and Samsung Electronics, with 567,503 shares, each took up their full allotments following board approval, reaffirming the group's commitment to nurturing the affiliate.

The employee stock ownership plan also posted strong participation, with 405,430 shares subscribed out of a priority allotment of 454,000, for a take-up rate of 89.3%.

The subscription results drew particular attention from the industry given the labor tensions surrounding the company. Samsung Biologics' mutual-benefit union launched a three-week second strike Friday, centered on indirect departments including quality control, quality assurance and logistics.

Labor disputes are considered an especially sensitive risk for biopharmaceutical manufacturers, where flawless quality management and on-time supply are central to maintaining the trust of global clients. Even so, investors submitted more than 30,000 shares in oversubscriptions despite a confirmed issue price of 1.174 million won per share.

The market, in effect, placed the company's solid fundamentals above concerns over temporary labor uncertainty or share dilution from the large new issuance.

Industry observers say the trust shareholders showed reflects Samsung Biologics' track record of securing most of the world's top 20 pharmaceutical companies as clients, as well as its demonstrated ability to stabilize production through replacement staffing during labor actions.

Analysts say investors concluded that short-term labor noise would not undermine the company's core value — its competitiveness in winning global contracts and its operational stability.

The full 2.665 trillion won raised through the rights offering will go toward acquiring PolyPeptide Group, a global peptide contract development and manufacturing organization. The deal is the largest pharmaceutical and biotech merger and acquisition in South Korean history.

Samsung Biologics secured a 97.98% stake through a recent tender offer, surpassing the 90% threshold required to compulsorily acquire the remaining shares and effectively locking in full ownership. The strong subscription results put the company on stable footing to fund the acquisition.

The company plans to use the acquisition as a springboard for its "three-pillar expansion" strategy, targeting simultaneous growth across production capacity, portfolio breadth and geographic reach.

The deal will extend Samsung Biologics' modality coverage in one move — from its existing focus on antibody drugs, messenger RNA and antibody-drug conjugates into peptides, the key raw material for GLP-1-based obesity and diabetes treatments, one of the fastest-growing segments in the industry.

In addition, the acquisition brings in six production sites and a research and development center spanning five countries including Europe, the United States and India, sharply expanding the company's global manufacturing footprint.

The rights offering is structured as a shareholder allocation followed by a public offering of any unsubscribed shares. A public subscription for the remaining 71,854 shares will be held Thursday and Friday, with payment due Tuesday and new shares set to list on Nov. 30. Any shares left over after the public offering will be fully underwritten by the lead managers.