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Halla Climate Rebounds as Analysts Affirm Outlook: Seoul Mover

Halla Climate Control Corp. (018880) advanced in Seoul trading, rebounding from its steepest drop in almost 11 years, on speculation the company will show improved earnings in the second half.

The stock rose 2.2 percent to 23,500 won at the close in Seoul, after gaining as much as 6.1 percent. The shares slumped 13 percent yesterday on concerns that Mando Corp., controlled by former parent Halla Group, will prevent a buyout of Halla Climate by its majority shareholder Visteon Corp. (VC)

Mando yesterday said it’s the preferred bidder for National Pension Service’s 8.1 percent stake in Halla Climate, a holding large enough to veto any revived buyout offer. While a new bid probably won’t happen in the near future, the company should show a strong second-half performance and the share price decline was overdone, according to analysts at NH Investment & Securities Co. (016420) and Dongbu Securities Co.

“There was no reason for the shares to fall like that, had it not been for this Visteon issue,” said Lee Sang Hyun, an analyst at NH Investment. “The pension fund thought Halla’s shares were worth more than Visteon’s initial offer of 28,500 won.”

Visteon owns 70 percent of Halla Climate and offered to buy the rest. National Pension Service, South Korea’s biggest institutional investor, said it rejected the bid on July 23.

Under Korean rules a buyout offer requires from Van Buren Township, Michigan-based Visteon needs to get approval from investors representing 95 percent of the acquisition target’s stock.

Visteon surged yesterday in New York, posting its biggest gain since exiting bankruptcy in 2010, after a Deutsche Bank AG report said Mando may try to buy the company.

To contact the reporters on this story: Rose Kim in Seoul at rkim76@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net;

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