Walter Cho Buys 37 Billion Won in Hanjin KAL Corporation Shares—Did He Respond to Hoban Group’s Bid to Become the Largest Shareholder?

[Financial News] Hanjin Group Chairman Walter Cho said he would buy 37 billion won worth of shares in Hanjin KAL Corporation. The move appears to be a countermeasure after reports raised the possibility that Hoban Group could increase its stake in Hanjin KAL Corporation and become its largest shareholder. Hanjin KAL Corporation, however, said the transaction is unrelated to a stake battle with Hoban Group.
On the 2nd, after reports emerged suggesting that Hoban Group could become Hanjin KAL Corporation’s largest shareholder, Cho announced an additional share purchase. He plans to acquire 325,000 shares, equivalent to a 0.48% stake, through an after-hours block trade from December 3 through New Year’s Day. At 114,000 won per share, the transaction is worth 37.05 billion won.
Cho had previously acquired 10,743 shares in Hanjin KAL Corporation through after-hours trading on August 4 for 1.2 billion won. The purchase price was 111,700 won per share. That transaction was also included in this disclosure. Once the purchase is complete, Cho’s personal stake in Hanjin KAL Corporation will rise from 5.75% to 6.23%. The combined stake held by Cho and parties related to him is expected to approach 21%.
With Cho increasing his stake, the Korea Fair Trade Commission’s review of the business combination involving Hoban Group becoming Hanjin KAL Corporation’s largest shareholder is unlikely to reach a conclusion soon. Cho’s control remains intact, and his position is clear given the substantial friendly stakes, including that of Delta Air Lines, which has a joint venture (JV) with Korean Air. Moreover, Hoban Group says its stake acquisition is for “pure investment purposes.”
Hanjin KAL Corporation, however, says Cho’s latest share purchase is unrelated to a stake battle with Hoban Group. In the disclosure, Cho said the purpose of the purchase was to “strengthen responsible management.” The transaction was prepared well in advance, with the parties agreeing on the number of shares and the unit price. A Hanjin KAL Corporation representative said, “We understand this is something that has been in preparation for a long time and is unrelated to Hoban’s moves.”
Hanjin KAL Corporation said it would make another disclosure regarding Hoban Group’s share purchase when specific details concerning the largest shareholder are confirmed, or within one month. The Korea Fair Trade Commission’s review following a change in the largest shareholder can take up to 90 days. Since Hanjin KAL Corporation and Hoban Group have different main businesses, the stake acquisition itself is not expected to be blocked on grounds such as restricting competition.

[email protected] Kim Yun-ho Reporter