IMM PE to buy extra Hanssem shares in tender offer

If the tender offer is successful, IMM’s stake in the furniture maker will increase to 36% from 28.2%

Hanssem headquarters in Seoul
Hanssem headquarters in Seoul
Ji-Eun Ha 1
2023-03-02 11:21:34 hazzys@hankyung.com
Private equity

IMM Private Equity will buy additional shares in South Korea’s Hanssem Co. for 100 billion won ($77 million) in a tender offer to inject fresh capital into the cash-strapped furniture maker.

Hanssem said in a regulatory filing on Thursday that its largest shareholder led by IMM will buy 1.8 million shares for 55,000 won ($42) apiece, equivalent to a 7.7% stake, between March 2 and March 21.

The offer price is 22% above its closing price on Tuesday, but about one-fourth of IMM’s purchase price of 221,000 won.

South Korea's stock market was closed on Wednesday due to a public holiday.

In 2021, Seoul-based IMM jointly secured control of Hanssem with Lotte Shopping, the country’s largest department store operator, for 1.45 trillion won.

The household name in the furniture market managed to avoid default risk last year, after IMM PE in December agreed to inject an additional 100 billion won into the company.

In 2022, the home furnishing brand swung to an operating loss of 21.7 billion won, hit by the real estate market downturn. Its loan-to-value ratio surpassed the 85% ceiling set by the lenders.

All the additional shares purchased will be provided as collateral to Hanssem’s lenders.

IMM had initially considered a rights offering or buying shares in the stock market to offer new capital to Hanssem, according to people familiar with the matter.

But it shifted to a tender offer after Hanssem's share price plummeted.

To improve its liquidity ratio, the investment firm was also understood to be looking to sell Hanssem's headquarters, according to sources last December.

If the tender offer was successful, IMM’s stake in Hanssem will increase to 36% from the current 28.2%, according to the filing.

As of end-September 2022, minority shareholders account for a 23.7% stake in Hanssem, followed by the US-based Teton Capital Partners with a 9.6% stake and the National Pension Service with a 6.36% stake.

Treasury shares make up 32.62% of its outstanding shares. Korea Investment & Securities Co. will handle the tender offer.

Write to Ji-Eun Ha at hazzys@hankyung.com

Yeonhee Kim edited this article.
#IMMPE #privateequity #Hanssem #Lotte #tenderoffer #M&A #TetonCapital

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