LG CNS plans $816 million IPO, South Korea biggest in 3 years
LG CNS to raise $816 million in South Korea biggest IPO in 3 years
LG Corp.’s tech-services unit, LG CNS Co., has started taking orders for an initial public offering (IPO) in Seoul that could raise as much as 1.2 trillion won ($816 million), which would make it South Korea’s largest IPO in three years.
LG CNS, whose services include cloud computing and warehouse management, is accepting bids until January 15, according to the terms of the deal seen by Bloomberg. The company and an entity owned by Macquarie Korea Asset Management Co. are offering 19.4 million shares priced between 53,700 won and 61,900 won per share, reports Bloomberg.
The political context and market impact
This IPO marks the first major share offering in South Korea since a political crisis in December that saw martial law measures enacted, which rocked the local financial markets. The Kospi benchmark index fell 10% last year, reflecting investor concerns about the political situation.
The deal would also be Seoul’s largest IPO since LG Energy Solution Ltd.’s $10 billion-plus share sale in January 2022. In total, IPOs in South Korea raised $1.5 billion in 2024, a slight increase from the previous year but far below the record $15 billion raised in 2021.
Implications for future IPOs
The outcome of LG CNS’s IPO could have significant implications for other companies, particularly online lender K Bank Co. Last year, K Bank withdrew its planned IPO, which was expected to raise over $700 million, due to concerns over valuation. The bank now aims to relaunch its IPO process in 2025.
LG CNS plans to use the funds raised from the IPO for facility upgrades, including replacing equipment in its data centres. The company also intends to use the proceeds for mergers and acquisitions of other tech-specialized firms and to repay outstanding bonds.
The company expects to price its shares on January 17 and list on February 4. Morgan Stanley, BofA Securities, and KB Securities are the joint global coordinators for the deal.
Reminder, shares of South Korean companies linked to Squid Game saw significant declines following the mixed reception of the show’s second season.
