Eyes on bookrunner roles on CJ Healthcare IPO The biotech firm’s owner has a strong tie with KB Securities and Samsung Securities

Translated by Ryu Ho-joung 공개 2019-12-05 08:00:00

이 기사는 2019년 12월 05일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korea’s CJ Healthcare and its owner Kolmar Korea are expected to name bookrunners on its planned initial public offering (IPO) soon. All eyes are on who wins a senior role on the offering, with some industry watchers observing that some of the firms in the short list might have the upper hand in the competition.

CJ Healthcare, a biotech company the Kolmar Korea-led consortium bought from CJ Group in 2018, is set to select underwriters for its planed listing as soon as early December. Included in the short list are five domestic brokerage firms – Mirae Asset Daewoo, Korea Investment & Securities, Samsung Securities, KB Securities and Shinhan Investment – as well as the U.S. investment bank JP Morgan.

The IPO plan has been revived this year by the new owner. During its first attempt at a listing, the company was originally working with NH Investment & Securities. The brokerage house, however, unexpectedly failed to be included in the short list, making the result more unpredictable.

Industry watchers say KB Securities and Samsung Securities, among other underwriters, should be “top-tier,” as both of them have a strong relationship with the company’s new owner Kolmar Korea.

In particular, KB Securities provided acquisition financing to Kolmar Korea when the maker of cosmetics and healthcare goods purchased CJ Healthcare last April. It also acted as lead manager on CJ Healthcare’s first bond offering. Meanwhile, Samsung Securities reportedly has a strong connection with Kolmar Korea’s top officials, including the chief executive.

Korea Investment & Securities and Mirae Asset Daewoo are also considered a viable choice, with their strong track record in the biotech sector. “There is nothing concrete yet about the number or composition of potential bookrunners,” a market insider said. “When only considering networking between the issuer and underwriters, it would be accurate to say that KB Securities and Samsung Securities have stronger ties [with the issuer] than any other candidates.”

It is thought to be a sure thing that JP Morgan, the only candidate in the short list among overseas firms, will work on the biotech company’s IPO due to strong support from three financial investors – H&Q, Mirae Asset Private Equity and STIC Investment – who participated in a consortium led by Kolmar Korea to invest in CJ Healthcare.

These private equity firms hold a 49.3 percent stake in aggregate. Kolmar Korea promised them it would help their exit by taking the company public by 2022. They reportedly demanded to include an overseas underwriter, aiming at attracting demand from global institutional investors.

The fact that Ha Jin-soo, who used to work with CJ Healthcare during its first IPO attempt when he was with NH Investment, is currently leading JP Morgan’s Korea ECM division also raises the possibility of the investment bank securing a bookrunner role on the deal.

“It is highly likely that the issuer will include an overseas investment bank among bookrunners considering a nearly-half stake held by three financial investors. [These investors] strongly support JP Morgan,” said a source in the investment banking industry. “Mr. Ha is playing a pivotal role in the process,” he added.

(By reporter Kim Si-mok)
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