Earning 2 Tril. Won in Gains This Year Alone
Singapore`s sovereign wealth fund Temasek Holdings has sold off 3.39 million shares in South Korean biopharma company Celltrion in a block deal worth around 865 billion won (US$764.13 million). This is the second block deal made by Temasek this year. When the first block deal took place earlier this year, Temasek said, “The sale is part of the rebalancing of the fund and we will continue to make a long-term investment.” However, the company put a considerable amount of shares on the market once again. Consequently, Temasek recouped nearly 2 trillion won (US$1.77 billion) of investments by selling its shares in Celltrion and Celltrion Holdings this year alone.
According to investment banking (IB) industry sources, Ion Investments, a subsidiary of Temasek, sold 3,391,700 shares out of its 15,617,794 shares, or 12.45 percent, in Celltrion in a block deal on Oct. 22. It accounts for 2.7 percent of the total shares issued by Celltrion. The discount rate of this block deal was known to be 8 percent from Monday’s closing stock price of Celltrion at 268,500 won (US$237.19). The period of the safeguard deposit for sellers is 90 days. The latest block deal has reduced Temasek’s stake in Celltrion to 9.7 percent. The sale was managed by Credit Suisse.
Temasek, one of the big investors of Celltrion, pushed a block deal selling 2.24 million shares, or 1.8 percent, in Celltrion and 2.9 million shares, or 2.1 percent, in Celltrion Healthcare in March this year. The price of the deal is estimated at 1.1 trillion won (US$971.73 million). The block deals of Celltrion’s subsidiaries have continuously taken place this year. One Equity Partner, a private equity fund firm spun-out from JP Morgan, also sold its 3.1 percent stake in Celltrion Healthcare worth 400 billion won (US$353.36 million) in a block deal in September. The deal was so big that the discount rate reached about 8 percent at that time.
The safeguard deposit was lifted in September after the block deal in March but the market said that there would be less likely to be an additional block deal of Celltrion at that time. This was because Temasek still expressed its intention to continuously make a long-term investment in Celltrion and the price of Celltrion shares didn’t rise much after the block deal. However, the market is now in confusion as more than 860 billion won (US$759.72 million) worth of the block deal has been put on the market, contrary to market expectations. A fund manager from a securities company said, “I am embarrassed because it was an unexpected block deal. I should keep an eye on how the market will react.”