[Click eStock] "Hanta Expands Acquisition Stake in Hanon Systems... Best for Both Companies"

On the 2nd, DB Financial Investment evaluated that the decision by Hankook Tire & Technology to expand its acquisition stake in Hanon Systems is the best choice for both companies.

According to the management disclosure by Hanon Systems published after the market closed on the 30th of last month, the number of shares and price per share for the acquisition of existing shares were changed from 133.45 million shares to 122.774 million shares, and from 10,250 KRW to 10,000 KRW, respectively. Additionally, the number of shares and price per share for the acquisition of new shares through a paid-in capital increase were changed from 65.14496 million shares to 144.962552 million shares, and from 5,605 KRW to 4,139 KRW, respectively.

Researcher Nam Ju-shin stated, "Calculating the acquisition-related costs, the total amount for acquiring existing shares decreased from 1.37 trillion KRW to 1.23 trillion KRW," and added, "The payment amount for the paid-in capital increase through new share acquisition increased from 365.1 billion KRW to 600 billion KRW."

Nam further argued, "Although the total cost increased from 1.73 trillion KRW to 1.83 trillion KRW, an increase of about 100 billion KRW, which might seem negative, I do not think so."

First, from Hankook Tire’s perspective, it means they can acquire a larger stake compared to the previous plan.

Nam pointed out, "Under the original plan, after Hanon Systems’ paid-in capital increase, the total number of common shares would be 598 million, with Hankook Tire holding 320 million shares, resulting in a stake of approximately 50.5%. However, under the revised plan, Hankook Tire will hold 372 million shares, achieving a 54.8% stake."

He also analyzed, "Although the total cost increased, the amount paid to Han & Company (PEF) decreased, and the funds provided to the subsidiary (Hanon Systems) increased. Hankook Tire’s stake in Hanon Systems will be about 54.8%, establishing a parent-subsidiary relationship."

This implies that from Hanon Systems’ perspective, more abundant funding will enable an overall improvement in its financial structure.

Nam concluded, "As a result, since the number of new shares to be issued increased by 123% compared to the original plan, shareholder dilution is inevitable. However, if Hankook Tire’s acquisition of Hanon Systems was bound to happen eventually, both companies have made the best choice. We can look forward to enhancing corporate value through synergies between the two companies from a long-term perspective."