Hynix Tumbles on Discounted Share Worries

SEOUL (Reuters) – Shares in Hynix Semiconductor (000660.KS) tumbled on Friday on market talk the sale of a stake held by its shareholders including Korea Exchange Bank (004940.KS) could be worth less than earlier expected.

Market talk that the stake sale could be discounted to as low as 3 trillion won ($2.51 billion) from the 4 trillion won earlier expected was pressuring Hynix stocks, analysts said.

“This is after all a rumour. It is hard to pin down how it came about. But it certainly would be good news to whoever is interested in buying Hynix,” said Lee Ka-keun, an analyst at IBK Securities.

Preliminary bidding for a 28 percent stake in Hynix, the world’s No.2 memory chip maker, closed on Tuesday with only one bidder, fiber- and chemical-focused Hyosung (004800.KS). 

Many analysts and investors believe the chance for an acquisition by Hyosung are not high given the apparent lack of synergy from the combination and Hyosung’s limited financing capacity.

But the Asia Economy newspaper reported on Friday, citing a unidentified source, that Hyosung was getting positive responses from financial investors it had approached, among them Blackstone Group (BX.N) and Kohlberg Kravis Roberts & Co.

A spokesman at Hyosung declined to comment. Leading shareholder Korea Exchange Bank said it was not aware of any development in Hyosung’s plans. Blackstone and KKR could not be immediately reached for comment.

If the sale proceeds, Hyosung will submit a preliminary bid with fuller details in October.

Shares in Hynix closed 8 percent lower against the broader market’s 0.14 percent loss. Hyosung shares also fell 8 percent. ($1=1196.1 Won) (Reporting by Jungyoun Park and Rhee So-eui; Editing by Jonathan Hopfner)