Hahn & Company, a leading domestic private equity fund (PEF) manager, will acquire management control of the integrated real estate developer SK D&D.
Hahn & Company said on the 1st via a filing that it signed a stock purchase agreement to acquire all of the equity (31.27% stake) held by SK discovery, a co-controlling shareholder of SK D&D, at 12,750 won per share. The purchase price is about 74.2 billion won.
Hahn & Company also said it plans to acquire all remaining listed equity through a tender offer and pursue a voluntary delisting. The per-share purchase price is 12,750 won, the same as the price for acquiring the stake from the largest shareholder, SK discovery. This effectively offers minority shareholders the same control premium.
The tender offer price is higher than SK D&D's 52-week high as of the day before the launch date. It represents premiums of 13.9% over the previous day's close and 24.4%, 26.4%, 32.8%, and 46.3% over the average share prices for the prior 1, 3, 6, and 12 months, respectively.
The tender offer runs from today through the 29th. The settlement date is the 31st. All shares tendered will be purchased, and the tender offer consideration will be paid in cash. The expected closing date of the stock purchase agreement with SK discovery is the first monthly anniversary of the earlier of the date SK D&D is delisted and the date six months have elapsed from the contract date, or another date as the parties may agree.
Previously, Hahn & Company invested in SK D&D in 2018 and has jointly managed the company with SK discovery as co-controlling shareholders. However, it views the real estate development business that SK D&D engages in—which requires quarterly disclosure of results—as ill-suited for a listed company involving general investors, and decided to pursue this delisting to unlock the corporation's growth potential.
According to Hahn & Company, real estate developers assume long-term investment, injecting large amounts of capital upfront and raising borrowing fund. They then carry out projects over extended periods, including permits and approvals, product design, construction and cost control, sales, and tenant acquisition. Revenue is typically recognized only when a project nears completion. If a project does not proceed as initially planned, losses can occur and additional funding may be needed, reflecting inherent risks. Therefore, it is a business structure in which it is difficult to maintain stable results and reflect the company's intrinsic value in the share price.
A Hahn & Company official said, "Over the past 7 years, we have built understanding and expertise in real estate development through joint management of SK D&D," adding, "We will work to maximize SK D&D's long-term corporation value by converting it into an unlisted company going forward."