Samsung Biologics is experiencing a decline in its stock price after announcing a capital increase of approximately 3 trillion won (about $2.3 billion) to acquire a Swiss peptide contract development and manufacturing organization (CDMO). Concerns over the dilution of existing shareholders' equity due to the large issuance of new shares are weighing on investor sentiment.
As of 9:59 a.m. on the Korea Exchange, Samsung Biologics shares were trading at 1,535,000 won, down 59,000 won (3.70%) from the previous trading day. At one point during the session, the stock fell to 1,480,000 won, dipping below the 1.5 million won mark.
On the same day, Samsung Biologics announced before the market opened that it would proceed with the capital increase. The company plans to issue 2.27 million common shares through a rights offering followed by a public offering of any unsubscribed shares. This issuance represents about 4.9% of the total shares outstanding, which is 46,299,951 shares.
The funds raised through this capital increase will be used primarily for the acquisition of securities from another company, totaling approximately 2.7 trillion won, along with 294.8 billion won for facility investments, bringing the total to around 3 trillion won.
The main focus of this capital increase is the acquisition of the Swiss peptide CDMO company, Polypeptide Group. Samsung Biologics plans to allocate most of the funds raised to this acquisition, which involves purchasing 33,016,411 shares for 2.7 trillion won. Following the acquisition, Samsung Biologics will hold a 100% stake in Polypeptide Group.
The acquisition will be conducted through a public tender offer. Samsung Biologics intends to establish a subsidiary in Switzerland before initiating the tender offer to acquire the registered shares of Polypeptide Group, which is listed on the Swiss stock exchange.
Dr. Draupnir Holding, the largest shareholder of Polypeptide Group, has committed to tendering all of its 18,375,000 shares, which represents 55.65% of the company.
The acquisition is scheduled to be completed by November 30. The record date for the new shares from the capital increase is October 6, with subscription for employee stock options set for November 9 and for existing shareholders on November 9-10. Payment is due on November 17, and the new shares are expected to be listed on November 30. The subscription rights certificates will also be listed.
Samsung Biologics stated that the purpose of acquiring Polypeptide Group is to enhance its business competitiveness through the acquisition of a peptide CDMO company.
Kim Jun-young, a researcher at Meritz Securities, noted in a report prior to the announcement of the capital increase plan on July 24 that the acquisition of Polypeptide is strategically significant for expanding the company's focus from antibodies to peptides and entering high-growth markets like GLP-1. However, he cautioned that considering the acquisition cost of approximately 2.7 trillion won along with future investments in six factories and a third campus, the burden of capital allocation may increase, necessitating a clear funding strategy.
* This article has been translated by AI.
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