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Samsungís Cheil Said to Gauge Demand for $1.5 Billion IPO

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IMAGE: Lee Kun Hee, Samsung Group Chairman »


Cheil Industries Inc., the de facto holding company of Samsung Group (005930), plans to start gauging demand next week for an initial public offering in South Korea, people with knowledge of the matter said.

The theme park operator’s share sale may raise about $1.5 billion, the people said, asking not to be identified because the information is private. The IPO would be the country’s biggest in more than four years, according to data compiled by Bloomberg.

Cheil’s offering comes as South Korea’s biggest conglomerate reorganizes ahead of an expected once-in-a-generation change in leadership. Since 72-year-old patriarch Lee Kun Hee was hospitalized in May, Samsung Group has announced the merger of shipbuilding and engineering affiliates and applied to take its network technology business Samsung SDS Co. (018260) public.

Park Hyung Geun, a spokesman for Cheil, declined to comment on the IPO plan. Cheil applied in September for a listing on South Korea’s main bourse, without providing details such as the size of the offering.

Cheil, formerly known as Samsung Everland Inc., is an operator of zoos, golf courses and theCaribbean Bay, billed as one of the world’s largest water parks. Daewoo Securities Co., Woori Investment & Securities Co., Citigroup Inc. and JPMorgan Chase & Co. are arranging the IPO, the company said in June.

Succession Planning

The company sits atop the Samsung Group through direct and indirect stakes in key affiliates including Samsung Electronics Co., the maker of Galaxy smartphones, and Samsung Life Insurance Co. It’s also central to the group’s succession planning because Lee’s only son, 46-year-old Lee Jae Yong, is the biggest shareholder with a 25 percent stake.

Samsung SDS, which provides technology services to construction and manufacturing companies, will start taking orders Nov. 5 for an IPO that could raise 1.16 trillion won ($1.1 billion), an Oct. 22 regulatory filing shows. The share sale may help the younger Lee, who owns more than 11 percent of the company, pay the inheritance tax on assets passed down from his father, according to corporate watchdog CEOSCORE.

Lee Kun Hee is South Korea’s richest person with a net worth of $11.7 billion, while his son has a net worth of $4.2 billion, according to the Bloomberg Billionaires Index.

Political pressure is mounting on Samsung Group to unwind a web of cross-shareholdings that allow the family to maintain control of about 70 companies with less than a 2 percent total stake. President Park Geun Hye’s government has banned the creation of new cross-shareholdings and offered tax breaks for restructuring in a bid to improve corporate governance and make the family-run chaebol business groups more transparent.

Article Credit: Bloomberg

Updated 5 Years ago

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Tags:     Cheil Industries Inc.     The IPO     Samsung Group     Park Hyung Geun     Samsung Everland Inc.     President Park Geun