[Click eStock] "Hanssem Strengthens IMM PE Control by Abusing Treasury Shares"

Hi Investment & Securities pointed out on the 29th that the share repurchases conducted by Hanssem ultimately resulted in strengthening the control of the largest shareholder, IMM PE. The investment opinion 'Buy' and the target price of 58,000 KRW were maintained.

Lee Sangheon, a researcher at Hi Investment & Securities, stated, "Hanssem's share repurchases have transferred shareholders' profits to the largest shareholder."

Currently, the largest shareholder of Hanssem is the private equity firm IMM PE. After IMM PE acquired management rights of Hanssem, it repurchased treasury shares worth 180.2 billion KRW in three rounds between January and June last year. The average purchase price was about 77,000 KRW per share.

The issue arose due to the recent tender offer conducted by IMM PE. It is evaluated that they increased their stake by utilizing treasury shares.

Lee pointed out, "Through this month's tender offer, 1,818,182 shares (7.7%) were acquired at 55,000 KRW per share, of which 744,881 treasury shares participated in the tender offer."

He emphasized, "The share repurchases effectively transferred shareholders' profits to IMM PE, and by utilizing treasury shares acquired based on distributable profits, the largest shareholder strengthened their control."

Lee sharply criticized, "Strengthening control by using treasury shares acquired based on distributable profits instead of directly spending money by IMM PE causes an agency problem between the controlling shareholder and minority shareholders."

Furthermore, he pointed out that the factor enabling the founder of Hanssem to receive a management premium on their shares is largely due to treasury shares.

Lee explained, "In January, honorary chairman and founder Cho Changgeol and related parties sold 27.7% of shares for 1.44 trillion KRW. The factor for the management premium was treasury shares (26.7%), which allowed IMM PE to utilize treasury shares in various ways."

He added, "It is expected that a considerable amount of time will be required for Hanssem's performance to normalize. In such a situation, it is necessary to return to the basics of improving governance."