Formerly AJU Capital
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com. -- Ed.
WFG has decided to take WF Capital as a fully-owned subsidiary through: 1) acquisition of treasury stocks; and 2) share swaps. The share price for WF Capital is expected to be in line with that for WFG.
WFG to take WF Capital as fully-owned subsidiary
On May 21, the Woori Financial Group (WFG) BOD decided to take WF Capital (formerly AJU Capital) as fully-owned subsidiary via: 1) acquisition of treasury stocks (owned by WF Capital); and 2) a conducting of share swaps between WFG and WF Capital. After the share swaps, WF Capital is to become a fully-owned subsidiary of WFG (WFG 86.89% + treasury stock acquisition 3.59% + share swaps 9.53% = 100%).
The swap ratio is to be 1 (WFG): 1.0567393 (WF Capital). Dissenting shareholders can express their objections over Jun 9~Jul 22. Trading of the involved stocks is to be suspended from Aug 6.
Dissenting shareholders will be allowed to exercise appraisal rights for whole or part of their shares. Shareholders who have held shares as of today (May 24) will be able to exercise appraisal rights. The projected price for appraisal rights exercise is W11,539/share.
WF Capital’s share price to be in line with WFG’s
From today, we expect WF Capital’s share price to move in line with that for WFG, based on the announced share swap ratio. However, the share price is not to go below the expected price for appraisal right exercise as stocks traded up until today are subject to appraisal rights exercise.
WFG is expected to take WF Capital as a fully-owned subsidiary. WFG is issuing some new shares for the share swaps, but as the new shares represent only a 0.8% portion of the overall number of WFG shares, dilution effects should prove insignificant. Moreover, we point out that WFG’s ROE is set to strengthen as the ROE for WF Capital is higher than that for WFG (1Q21 ROE: WFG 11.5%; WF Capital 16.3%).