April 20, 2024

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[THE INVESTOR] MBK Partners, the nation’s largest private equity firm that owns ING Life Insurance, raised 1.1 trillion won (US$977 million) from its initial public offering this week despite tepid demand from individual investors.

During the two-day public issue, the IPO received bids for 5.47 million shares against 6.7 million shares on offer -- the weakest demand for this year issues on the nation’s stock market.

The IPO, however, managed to got fully subscribed as institutional investors put bids for all non-subscribed shares.

ING Life will start trading on KOSPI on May 11. Based on the subscription price of 33,000 won, the market valuation is expected to reach about 2.7 trillion won.

MBK acquired ING Life from ING Group for 1.8 trillion won in 2013. The firm had sought to sell the insurer to Chinese buyers for about 4 trillion won last year but the attempt failed due to high price and rising political tensions between Korea and China over the deployment of the THAAD missile defense system.

Until April, institutional investors at home and abroad showed keen interest in the IPO largely due to the its high dividend payouts. Earlier the estimated subscription rate reached 1:3.9.

But this week individual investors remained muted. Along with stiff competition within the life insurance industry overall, there has been speculation that the IPO was overpriced as part of MBK’s ultimate exit strategy.

MBK’s remaining stake in the insurer of 59.1 percent is worth 1.6 trillion won.

“The insurer has completed the IPO process despite several hurdles. But the issue is its future valuation,” an industry source said.

By Park Ga-young (gypark@heraldcorp.com)