[At a Crossroads: Listed Company] Blitzway① Entertainment Company Merger
Entertainment Company Established 3 Years Ago Valued at 14.4 Billion Won
Major Shareholder ‘Ju Ji-hoon’ Sees Stake Value Jump from 400 Million to 5.8 Billion Won
KOSDAQ-listed company Blitzway is expected to generate a profit of over 5 billion KRW for actor Ju Ji-hoon, the largest shareholder of the entertainment management company H&Entertainment, about three years after its establishment, through the absorption merger of H&Entertainment.
According to the Financial Supervisory Service's electronic disclosure, Blitzway plans to hold an extraordinary general meeting of shareholders on January 10. The agenda includes approval of the merger agreement with H&Entertainment and partial amendments to the articles of incorporation.
On the 22nd, Blitzway announced that it would absorb and merge with the entertainment agency H&Entertainment. H&Entertainment represents a total of 29 artists, including actors Ju Ji-hoon, Jung Ryeo-won, Ko Doo-shim, In Gyo-jin, So Yi-hyun, Chun Woo-hee, and Jung Soo-jung (Krystal). Blitzway, whose main business is figure manufacturing, aims to secure competitiveness in the content industry through this merger.
The largest shareholder of H&Entertainment is actor Ju Ji-hoon (real name Ju Young-hoon), who holds 34.6%. Including shares held by related parties, the total is 38.3%. The remaining shares are held by Hong Min-ki, CEO of H&Entertainment (18.0%), Park Sang-seok, director (3.0%), and others.
The merger ratio is 1 to 6.5636545 shares. For each share of H&Entertainment, Blitzway will newly issue and distribute 6.5636545 shares. The higher the corporate value of H&Entertainment, the more Blitzway shares its shareholders can receive.
The value per share of Blitzway and H&Entertainment was calculated as 2,003 KRW and 13,147 KRW, respectively. The total corporate value of H&Entertainment was evaluated at 14.4 billion KRW. After the merger, Ju Ji-hoon will hold a 5.81% stake in Blitzway. Based on the merger price, this is approximately 5.8 billion KRW.
H&Entertainment was established in June 2020 with a total capital of 1.1 billion KRW. Based on the current shareholding ratio, Ju Ji-hoon is estimated to have initially invested about 400 million KRW. This 400 million KRW has grown to 5.8 billion KRW in three years through the merger with Blitzway.
The corporate value of H&Entertainment was calculated as the average of the asset value currently held and the expected earnings value based on future revenue potential. The asset value is 4.4 billion KRW, and the earnings value is 22 billion KRW. The future earnings potential was valued significantly higher than the current assets.
H&Entertainment recorded sales of 5.9 billion KRW and an operating loss of 300 million KRW through the first half of this year. However, it expects to achieve sales of 15.2 billion KRW and an operating profit of 400 million KRW by the end of the year. The company projects continued growth, estimating sales of 34.6 billion KRW and operating profit of 4.4 billion KRW by 2027.
The company stated, "This year’s sales were estimated based on confirmed activity-related amounts, and for 2024, in accordance with industry practices where appearances and amounts are confirmed in advance, estimated appearance fees were used for confirmed drama, advertisement, and film appearances. From 2025 to 2027, estimates were made considering the past activity cycles and appearance fee increase rates of affiliated artists, as well as the company’s business plans."
Meanwhile, Blitzway has set December 12 as the record date for shareholders eligible to vote at the general meeting for this merger. Shareholders opposing the merger can express their dissent from December 26 to January 9 and exercise their right to request the purchase of their shares. The expected purchase price per share is 2,022 KRW.
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