KCGI Signs Definitive Agreement to Acquire Hanyang Academy and Hanyang Securities
7 Weeks After Negotiations Began
Hanyang Academy, which is promoting the sale of Hanyang Securities, and the private equity fund (PEF) management company KCGI, the preferred bidder, signed a Stock Purchase Agreement (SPA) on the 19th. KCGI will complete the acquisition of Hanyang Securities once it passes the Financial Services Commission's major shareholder suitability review.
On the same day, Hanyang Securities announced that KCGI agreed to acquire 3,766,973 common shares of Hanyang Securities (29.59% stake) from Hanyang Academy, Baeknam Tourism, and HBDC for 220.367925 billion KRW. The acquisition price was set at 58,500 KRW per share, about 10% lower than the initially proposed 65,000 KRW per share by KCGI.
KCGI plans to soon apply to the financial authorities for the major shareholder suitability review. Although the review is generally completed within 60 days from the application date, it may be extended due to reasons such as supplementary documentation.
Hanyang Securities explained, "Following the Financial Services Commission's approval of the major shareholder change, the final change of the largest shareholder will be completed," adding, "If the Financial Services Commission does not approve, the stock purchase agreement may be terminated."
The SPA signing between the two parties came about seven weeks after KCGI was selected as the preferred bidder for Hanyang Academy on the 2nd of last month and negotiations began. The two sides initially agreed to complete negotiations by the 6th but extended the negotiation period twice due to prolonged discussions over detailed contract terms.
As negotiations dragged on, market speculation arose that there was a significant difference in views between the two parties regarding the sale price of Hanyang Securities. The initial desired price of 65,000 KRW per share proposed by KCGI is about four times the closing price of Hanyang Securities on the 19th, which was 16,670 KRW.
Hanyang Academy is a private educational foundation operating Hanyang University, and Hanyang Securities was established in 1956 by the school to diversify its revenue sources. Hanyang Securities ranks 28th among domestic small and medium securities firms based on equity capital but is recognized for its strengths in corporate finance, including bond issuance and real estate financing. Hanyang Academy is promoting the sale of Hanyang Securities to resolve financial difficulties faced by its affiliated construction company, Hanyang Industrial Development.
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