Hanjin KAL Preferred Shares Hit the Upper Price Limit Again, Surge Fourfold in Seven Trading Days Amid Hoban–Walter Cho Stake Battle

[Financial News] The stake battle over Hanjin KAL between the Hoban Group and Walter Cho, chairman of Hanjin Group, has reignited, sending Hanjin KAL preferred shares soaring to the daily price limit again. Expectations of a possible control dispute appear to be spreading beyond Hanjin KAL common shares to its preferred shares as well.
According to the Korea Exchange (KRX), as of 9:40 a.m. on the 11th, Hanjin KAL preferred shares were trading at 136,100 won, up 31,400 won (29.99%) from the previous trading day. Buying surged from the start of the session, sending the shares to the upper price limit. Trading volume was about 190,000 shares.■ Control premium comes into focus amid Hoban–Walter Cho stake battleHanjin KAL preferred shares have continued their steep rise this month. The share price, which stood at 34,150 won on the 2nd, surged to 136,100 won intraday on the 11th.
The shares rose to nearly four times their previous level in just seven trading days. They hit the upper price limit for five consecutive trading days from the 2nd through the 6th, and rose by the full daily limit again on the 9th. They paused at the previous close on the 10th, but hit the upper limit again today, resuming their sharp rise.
The stake battle between the Hoban Group and Cho's side over Hanjin KAL is seen as a factor driving up the share price. The Hoban Group secured a stake of 20.69% in Hanjin KAL, surpassing the 20.58% stake held by Cho, who had previously been the largest shareholder, and parties related to him.
In response, Cho moved to buy 325,000 common shares in Hanjin KAL for about 37.05 billion won. If the purchase is completed as planned, the stake held by Cho's side will rise to 21.07%, putting it ahead of the Hoban Group once again.
With little difference between the two sides' stakes and the possibility of further purchases being discussed, expectations for a control premium are growing in the market. This is also why buying, previously concentrated in Hanjin KAL common shares, is spreading to its preferred shares.
However, it is difficult to interpret the sharp rise in Hanjin KAL preferred shares solely as a direct result of an actual control battle. They are preferred shares with no voting rights. Unlike common shares, which are directly linked to demand for stake purchases to secure control, these shares cannot be used to cast votes at shareholder meetings that determine who controls the company. In effect, they are hitting the upper price limit on expectations of a control dispute despite having no voting rights to determine control.
The fact that the Hoban Group has secured the position of largest shareholder should also be distinguished from actually taking control of the company. Cho's side has secured friendly stakes, including that of Delta Air Lines, and the position of largest shareholder could change again if Cho completes his additional share purchase. ■ Possible move to a higher market-alert level...short-term surge raises investment risksInvestment risks are also increasing amid the sharp short-term rise. The Korea Exchange designated Hanjin KAL preferred shares as an investment-warning issue on the 5th in connection with the surge in their share price.
The market alert system operates in three stages: investment caution, investment warning and investment risk. Since the shares have already reached the investment-warning stage, they could be designated as an investment-risk issue depending on future price movements.
A KRX official said, “The market alert system operates in three stages: investment caution, investment warning and investment risk,” adding, “The shares are currently designated as an investment-warning issue and could be designated as an investment-risk issue if they meet the relevant criteria in the future.”
[email protected] Kang Jung-mo Reporter