Real estate rights investigation company REFINE has been embraced by LS SECURITIES and private equity firm Stonebridge. As the acquisition process that began last year is finalized, investor interest is focused on how the new majority shareholder will utilize the company's substantial cash assets. As of the end of last year, REFINE's cash assets amounted to 130 billion won.
It is expected that REFINE, under its new ownership, will actively pursue dividends by utilizing the cash it has accumulated. REFINE has not issued any dividends since 2020. LS SECURITIES established the investment purpose company Realty REFINE with private equity firm Stonebridge Capital to acquire REFINE, contributing 70 billion won and 90 billion won, respectively.
LS SECURITIES and Stonebridge Capital completed the payment for the equity acquisition, including management rights of REFINE, on the 2nd. As a result, the majority shareholder of REFINE changed to Realty REFINE.
LS SECURITIES signed a stock purchase agreement to acquire 34.1% of REFINE's equity with Stonebridge Capital in December last year, securing management rights, and finalized the acquisition with the approval of the financial authorities. LS SECURITIES and Stonebridge bought REFINE's equity at 27,159 won per share, which reflects a significant management premium compared to the stock price at that time, around 15,000 won.
It is interpreted that LS SECURITIES viewed positively the situation where REFINE can steadily expand its revenue based on its monopolistic position in the real estate rights investigation market. REFINE's market capitalization is around 230 billion won, but its cash assets reached 130 billion won as of the end of last year. Moreover, REFINE has been consistently generating an annual net income of around 20 billion won.
Industry insiders expect that REFINE, now under new ownership, will actively pursue dividends. This is because it has secured a stable revenue structure and has ample capacity to distribute dividends. Additionally, since LS SECURITIES acquired REFINE alongside private equity firms, there is a growing voice that active dividends will be carried out.
NH Investment & Securities noted, "REFINE will have sufficient cash dividend capacity in the future," and analyzed that "there is a high likelihood that the acquirer will attempt to recover investment through a high dividend policy (exit)." The expectation of dividends has led to a steady increase in REFINE's stock price this year, rising from around 9,000 won in March last year to over 13,000 won now.
Industry insiders are also paying attention to REFINE's treasury stock. If the company issues exchange bonds targeting the majority shareholder, LS SECURITIES may expand its equity further. REFINE holds 13.9% of its own shares (including trust).
If LS SECURITIES acquires EB targeting the company's treasury shares, it can acquire additional equity at a lower price than before. The exchange price of the EB is determined based on the stock price at the time of the board resolution deciding on the bond issuance, and REFINE's stock price has been fluctuating between 12,000 won and 13,000 won this year.