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Ofer rumored to be planning takeover of Hanjin Shipping(Israel Business Arena Via Thomson Dialog NewsEdge) South Korean daily "Korean Herald" reports about speculation that Israeli shipping magnate Sammy Ofer is planning a takeover of Hanjin Shipping Co. Ltd. (KSX:00700). Ofer bought 8.7% of the company last week for $161 million, and now owns 12% of it, making him the largest shareholder. Hanjin Shipping is South Korea's largest shipping company and the eighth largest in the world. Zim Integrated Shipping Services Ltd., controlled by Ofer Brothers Group through Israel Corp. (TASE:ILCO) is the world's 13th largest shipping company. The "Korean Herald" says "Hanjin Shipping Co. is expected to be among the hottest items on the local bourse following speculation that Korea's largest shipping line may be the target of a hostile foreign takeover." The company's share rose 9.1% on news of Ofer's stock purchase, following a 5.6% rise by the close of trading on Thursday. Denials were quick in coming. Monaco-based Samama Group, owned by Ofer, confirmed the share purchase the week before. The "Korean Herald" quoted Samama Group as saying that "the purchase was with a pure investment purpose." No takeover attempt is planned. The "Korean Herald" quotes Mirae Asset Securities shipping industry analyst Ryu Jay-hyun as saying that it was unlikely that the stake purchases was part of hostile M&A activity. He added that Hanjin Shipping chairman Cho Soo-ho and friendly shareholders hold a relatively high stake in the firm, and that it was less vulnerable to hostile takeover attempts. The paper quotes Hanjin Shipping officials as saying that management friendly shareholders ( i.e. shareholders who will not collaborate with Ofer) own about 30% of all shares. The "Korean Herald" also quotes Ryu as saying that Ofer would probably demand management measures to enhance the value of the company and bolster its share price, in conjunction with other foreign investors. The likelihood that Ofer bought the stake in Hanjin Shipping solely as an investment seems logical in view of "Buy" recommendations for the share with a target price 15% above its current price. The "Korean Herald" also quotes Ryu as saying that share prices of major container shipping lines are showing an upward swing globally after trading relatively low in July-September. The paper quotes another analyst as saying that investors see Hanjin Shipping as undervalued compared with the company's real assets. This was not Ofer's first transaction in Korea. In June, Israel Corp. announced that Zim's board decided to buy eight container carriers from Hyundai Shipyards for $1 billion. The ships will be delivered within three years. South Korea is the world's largest shipbuilder. Published by Globes [online], Israel business news - www.globes.co.il - on October 16, 2006 Copyright of Globes Publisher Itonut (1983) Ltd. 2006 Copyright 2006 Globes. Source : Financial Times Information Limited. |