Metrica Partners will not tender its funds’ shares in SK Chemicals to SK Discovery
- SK Discovery’s tender offer price is very low, representing a 74% discount to net assets.
- SK Chemicals has still not adequately compensated its shareholders for the split-off of SK Bioscience. The Korean regulator has recognised how split-offs can hurt the interests of investors.
- Only a wholesale restructuring can restore the market’s trust in SK Chemicals.
Metrica calls for a strategic review at SK Chemicals
- Metrica welcomes the recent value-improving initiatives announced by SK Chemicals.
- However, these measures have had only a very limited impact on the share price discount, which still exceeds 80%.
- Metrica calls for SK Chemicals to launch a formal strategic review within the next two months to consider further measures to address the discount, up to and including a sale or spin-off of SK Bioscience.
Metrica Partners urges SK Chemicals to sell SK Bioscience shares upon the lockup expiry
- The board of SK Chemicals seems unconcerned with its shares trading at an 83% discount to net asset value. In Metrica’s view, the board has a fiduciary duty to care about its share price.
- The company should address the discount by selling a stake in its subsidiary SK Bioscience upon the IPO lock-up expiry of 18 September and distributing the proceeds to shareholders.
- SK Chemicals can pay a special dividend of 1.3x its share price while still retaining 50% ownership in SK Bioscience as well as 100% ownership of its profitable chemical and pharmaceutical businesses.