이 기사는 2022년 05월 11일 08:12 thebell 에 표출된 기사입니다.

SK shieldus has decided to cancel its initial public offering (IPO) plan as its bookbuilding drew lukewarm investor interest due to an excessive valuation and a high proportion of shares sold by an existing shareholder. Some market experts said that the supply-demand imbalance after LG Energy Solution (LGES)’s IPO earlier this year also had an impact on the SK shieldus’ bookbuilding results.

The security services provider owned by SK Square submitted a delisting notice to Korea’s financial regulator on Friday.

The company saw 200-to-1 competition at its bookbuilding for institutional investors last week. Most of the institutions made bids below the company’s proposed price band of between 31,000 won ($24.32) and 38,800 won.

It has decided to cancel the remaining procedures as its corporate value is not properly estimated under the current market conditions, the company said.

Analysts said an excessive corporate value led to lukewarm investor demand in the bookbuilding. SK shieldus recorded earnings before interests, taxes, depreciation and amortization (EBITDA) of 381.6 billion won in 2021. It valued itself at up to 3.5 trillion won, calculated by multiplying its EBITDA by the average enterprise value to EBITDA multiple of 14.86 times for its four industry peers.

Market watchers said the market capitalization was too high, compared with the country’s top security solutions provider S-1’s 2.5 trillion won. SK shiedus’ valuation is more than three times Ahnlab’s 900 billion won-1 trillion won.

A high proportion of shares sold by an existing shareholder also chilled market sentiment. About 47% or more than 12.64 million shares of the total offering were to be sold by Blue Security Investment (Macquarie PE).

An industry source said Hyundai Engineering had to pull its IPO in January as 75% of the total offering was sold by existing shareholders. “Macquarie PE sharply reduced its shares to be sold in the IPO but that was apparently not enough to attract investors,” the source said.

Some market watchers said the supply-demand imbalance after LGES’s listing earlier this year is the real reason behind SK shieldus’ failed IPO.

The world’s second-largest battery maker attracted bids worth some 15,200 trillion won in total in its bookbuilding in January and raised 12.8 trillion won in the nation’s biggest IPO. The IPO beat the previous South Korean records held by Samsung Life Insurance's 4.9 trillion won offering and Krafton’s 4.3 trilion won offering.

About 80% of the institutional investors who participated in the bookbuilding agreed to a lock-up clause, promising not to sell the stock post-IPO for at least 15 days to six months.

The proportion of locked-up shares of LGES’ total issued shares is nearly 85%. Given that LGES’ market capitalization stands at between 90 trillion won and 95 trillion won, 70 trillion won-80 trillion won of funds are locked up in LGES shares.

“Considering that most of the institutions promised to hold IPO shares for at least 6 months, trillions of won are still locked up in LGES shares,” a market insider said. “Hyundai Engineering’s IPO was hit hard by the supply-demand imbalance in January and it has continued to have an impact on SK shieldus’ IPO.” (Reporting by Chul Kang)