Hyundai Merchant Co. builds takeover defense

Hyundai Merchant Marine Co. stock surged 9.6 percent yesterday after Korea’s second-largest shipping line said it planned to buy back 300,000 shares.
The stock jumped 3,650 won to 41,650 won at the 3 p.m. close in Seoul after rising as much as 13 percent, while the benchmark Kospi index gained 0.8 percent. The shipping line reported the share buyback in a Korea Exchange filing.
Hyundai Merchant plans to buy 100 billion won ($110 million) of stock through Hyundai Securities Co. in the year started April 30, as part of Chairwoman Hyun Jeong-eun’s attempts to erect takeover defenses. About 75 percent of Hyundai Merchant shares are held by its six biggest stockholders, according to data compiled by Bloomberg, curbing the amount available to buy back.
Hyundai Merchant’s limited free float means “the impact of the share buyback should be big,” said Ryu Je-hyun, an analyst at Mirae Asset Securities Co. He rates the stock as “buy.”
Hyundai Securities had bought 118,000 Hyundai Merchant shares as of 2:07 p.m. yesterday, according to Korea Exchange data.
The Seoul-based shipping line is purchasing its own shares and it hasn’t spent the budgeted amount yet, a Hyundai Merchant spokesman, who declined to be identified, said yesterday.
Hyundai Heavy Industries Co. has bought shares in Hyundai Merchant, fuelling speculation about a takeover bid. The two companies were formerly part of the Hyundai Group, once Korea’s largest family-run industrial group until it was divided following disputes.