Hanjin KAL experienced a drop in its stock price after a two-day upper limit rise following the additional acquisition of shares by the Hoban Group. The possibility of a management dispute had previously fueled the stock’s increase, but analysis suggesting a low likelihood of Hoban Group’s successful hostile M&A influenced the reversal. On the 16th, Hanjin KAL closed at 125,000 won, a 17% decrease from the previous trading day. The stock had risen nearly 30% on both the 13th and 14th but couldn’t maintain the upward trend for a third day.
Hoban Group, the second-largest shareholder of Hanjin KAL, increased its stake from 17.44% to 18.46% by acquiring additional shares on May 12th. The move narrowed the shareholding gap with Hanjin Group Chairman Cho Won-tae (20.13%) to 1.67 percentage points, raising the possibility of a management dispute. However, major shareholders like Delta Airlines (14.90%) and the Korea Development Bank (10.58%) are seen as allies of Chairman Cho, suggesting that his management control is not easily threatened.
In response, Hanjin KAL announced after the market closed that it would contribute 440,044 shares, equivalent to 0.66% of the common shares, to the company’s employee welfare fund. Although treasury shares do not have voting rights, once transferred to the welfare fund, the shares gain voting rights, increasing the gap with Hoban Group by 0.66 percentage points.