Hana Financial Tumbles 7.3% After Temasek Sells Stake

Temasek Said to Sell Hana Financial Stake 681 Billion Won
Temasek sold Hana shares at 33,400 won apiece, a 6 percent discount from yesterday’s closing price and lower than its initial offer band of 34,300 won to 35,550 won. Photographer: Munshi Ahmed/Bloomberg

Hana Financial Group Inc. dropped the most in a year after Temasek Holdings Pte sold its stake in South Korea’s fourth-biggest financial company at a lower price than offered previously.

Hana tumbled 7.3 percent, the biggest drop since Oct. 5, 2009, to 32,950 won at the 3 p.m. close in Seoul trading, compared with the benchmark Kospi index’s 0.2 percent gain. Temasek, Singapore’s state-owned investment firm, sold its 9.6 percent stake for 33,400 won ($29.70) a share, lower than its initial offer band of 34,300 won to 35,550 won, two people with knowledge of the deal said. That put the sale at 681 billion won.

Temasek, which recently bought a stake in a Brazilian oil firm, is seeking to diversify its assets to energy investments as demand in emerging markets increases. Its Hana sale comes a week after the Seoul-based firm reported a 10 percent gain in third-quarter profit on higher lending margins.

“The ample volume in the market from Temasek’s block sale is hitting the stock hard today,” said Joanne Lee, a banking industry analyst at Shinhan Investment Corp. in Seoul. “Although the stock will probably undergo a correction in the short term, Hana’s strong earnings potential and sound fundamentals will help it recover soon.”

‘Active Investor’

Temasek sought to sell its 20.4 million shares of Hana, according to the terms of the offer obtained by Bloomberg News yesterday. Its investment in the Korean firm, held since 2004, gave a return of 71 percent in the year ended March 31, according to the Singapore company’s annual report in July.

“As an active investor, Temasek regularly reviews its portfolio and remains open to maintaining, increasing or reducing its holdings, depending on opportunities and market conditions,” company spokesman Jeffrey Fang said in an e-mailed statement, without giving a price.

Temasek’s recent investments in South Korea include light-emitting diode device manufacturers Seoul Semiconductor Co. and Seoul Optodevice Co., as well as biopharmaceutical firm Celltrion Inc., Fang said.

“We understand that Temasek has sold its stake as part of efforts to diversify its portfolio,” Lee Jung Dae, spokesman for Hana, said by phone in Seoul. Credit Suisse Group AG managed the Hana transaction.

Hana on Oct. 15 posted third-quarter profit of 265.1 billion won, more than analysts expected. The company’s banking unit in September completed the purchase of an 18 percent stake in China’s Bank of Jilin, almost three years after the plan was announced in 2007.

Profit Gain

Temasek, which has S$186 billion ($143 billion) in assets, said this week that it paid $400 million for a 14.3 percent stake in the oil services unit of Brazil’s Odebrecht SA.

Temasek’s investments in financial firms rose to 37 percent of its portfolio from 33 percent in the year to March 31, after it increased its stake in China Construction Bank Corp. and the value of such investments swelled as markets recovered, according to its annual report in July.

During the same period, the value of its investments in resources firms rose to S$11.2 billion, or 6 percent of its total portfolio, from S$6.5 billion, or 5 percent.

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