HD Hyundai Heavy Industries decided to absorb HD Hyundai Mipo in a merger. However, speculation arose that information might have leaked ahead of the board meetings for the two companies as stock prices surged even before the meetings began.
Shares of HD Hyundai Mipo closed at 216,000 won on the KOSPI market on the 27th. The stock rose by 14.59% (27,500 won) compared to the previous day. Shares of HD Hyundai Heavy Industries also closed up 11.32% (53,000 won) at 521,000 won. The stock price of HD Hyundai Heavy Industries peaked at 529,000 won during the trading session, marking the highest price since its partitioning and relisting in 2021.
Both shares of HD Hyundai Heavy Industries and HD Hyundai Mipo surged from the early trading session. This was due to the spread of rumors that a board meeting was being held to push for a merger in order to enter the U.S. defense market. Consequently, on that day, foreign investors and other institutions net purchased 82 billion won and 6 billion won of HD Hyundai Mipo shares, respectively, while individuals showed a net selling preference of 65 billion won.
The merger ratio between HD Hyundai Heavy Industries and HD Hyundai Mipo is 1:0.4059146. This was determined by calculating the arithmetic average of the recent closing prices over the past month and week based on the previous day's data. No separate premiums or discounts were applied.
The shareholder confirmation date is September 12. Those who hold 100 shares of HD Hyundai Mipo by this date will receive approximately 40 shares of HD Hyundai Heavy Industries.
HD Hyundai Heavy Industries and HD Hyundai Mipo plan to hold a general shareholders' meeting on October 23 to get approval for the merger proposal. The expected listing date for the new shares resulting from the merger is December 15.
Shareholders opposed to the merger can exercise their stock buyback rights from October 23 to November 12. The stock buyback right is the right of shareholders opposing a merger or partitioning to request the company to buy back their held shares.
The buyback price for the shares is set at 462,626 won for HD Hyundai Heavy Industries and 192,695 won for HD Hyundai Mipo. If the total amount of stock buyback requests exceeds 1.5 trillion won for both companies, the merger contract could be canceled.