Samsung SDS has set a preliminary price for its share listing, valuing the firm at around 15.47 trillion won ($14.88 billion), according to a person with direct knowledge of the matter, ahead of what may be South Korea's biggest listing this year.
The sale of shares in Samsung SDS, the IT services affiliate of Samsung Group, could raise at least 1 trillion won ($962 million), local media have reported. A spokesman for Samsung SDS said the firm is expected to list sometime in November but declined to provide more details.
The sprawling Samsung group, South Korea's biggest conglomerate, is restructuring its complex ownership ahead of an eventual generational succession. Samsung Electronics Co Ltd Chairman Lee Kun-hee, 72, the group patriarch, has been hospitalised since suffering a heart attack in May.
Samsung SDS is 19.05% owned by Lee's three children. A listing on the South Korean bourse would give them greater financial flexibility. They could use the funds raised to secure control of other key Samsung companies where they have little ownership, analysts have said. "SDS isn't very important in the group's ownership structure, but the next generation (of the owner family) owns stakes they can monetise," said Lee Sang-hun, analyst at HI Investment & Securities.
Cheil Industries Inc, considered the de facto holding company of Samsung Group, also applied for preliminary listing approval on the Seoul exchange this month after saying it would likely complete a listing by the first quarter of 2015.
Samsung SDS may list its shares on the Seoul bourse at around 200,000 won ($192.33) a share, the person told Reuters on Wednesday. Based on the number of shares outstanding at the end of June, that values the company at 15.47 trillion won.
The 200,000 won price is less than the 332,000 won where they traded on Seoul's OTC market on Tuesday. However, analysts say that may not be a meaningful comparison as the month-old OTC market is relatively illiquid, with an average of just 3,671 SDS shares trading per day thus far this month.
Samsung SDS is not expected to issue new shares, or would minimise the issuance of new shares for the listing, local newspaper Korea Economic Daily reported on Wednesday, without saying where it got the information. Jay Y. Lee and his two sisters are also not expected to divest shares in the listing, the newspaper said.
Instead, Samsung Group units that hold stakes in Samsung SDS, with the exception of Samsung Electronics, could offer their shares, the newspaper added. Samsung Electronics is SDS' biggest shareholder with a 22.58% stake. Other group units that own SDS shares include Samsung Electro-Mechanics and Samsung C&T
Goldman Sachs, Korea Investment & Securities and JPMorgan are advising on the listing.
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