Hanyang Foundation, the operator of Hanyang University, will sell its stake in its subsidiary, Hanyang Security, it said Monday. If sold, the ownership of the brokerage firm will change for the first time in 68 years since its foundation.
“Hanyang Foundation, our largest shareholder, is pursuing a stake sale. However, specifics regarding the buyer, sale price, method and schedule have not been decided or confirmed yet,” the brokerage firm said. “Within a month, or at a time when specifics are decided, we will post another disclosure.”
The announcement followed the Korea Exchange’s request for confirmation, as rumors regarding the brokerage firm’s sales steeply pushed up the stock price.
Since July 5, Hanyang Securities has experienced a consecutive seven-day increase in its stock price, with a particularly sharp rise of over 9 percent each day starting Thursday.
Hanyang Securities is a medium-sized domestic securities firm ranked around 30th in terms of equity capital. It is recognized for its strengths in investment banking and bonds. 커뮤니티 Last year, it reported an operating profit of 46.29 billion won ($33.47 million) and a net profit of 35.1 billion won.
As of March, Hanyang Foundation held a 16.29 percent stake in common shares. This amount rises to 40.99 percent when related parties are included.
Hanyang Foundation reportedly decided to sell the brokerage firm to supply liquidity after its subsidiary, Hanyang Development, incurred financial losses from real estate project financing. Another subsidiary, Hanyang University Hospital, is also facing financial difficulties due to the nationwide doctors’ strike.
Hanyang Securities’ sale is expected to give momentum to the M&A market of securities firms, as there have been no such deals since 2018, when three brokerages were sold.
Industry estimates suggest the transaction is expected to be around 100 billion won, given the firm’s market capitalization of 180 billion won and additional management rights premium.
Earlier, LX Group, private equity Korea Climate & Governance Improvement and Woori Financial Group, which recently acquired Korea Foss Securities, were speculated to be potential buyers of the firm. However, LX and Woori have denied these rumors.
Following the news of the sale Monday, Hanyang Securities saw a steep surge in its stock price. After starting at 15,000 won, it shot up to 17,210 won, setting a new 52-week high. It then closed at 15,000won, an increase of 7.53 percent compared to the previous trading day.