LONDON (Feb 16, 2005) — Shares in South Korean tire maker Kumho Tire Co. Inc. debuted today on the London Stock Exchange, trading in a range from $7.13 to $7.50 per global depository share.
Brokerages reportedly offered 22.4 million depository shares—equal to 11.2 million common shares—valuing the London action at about $160 million.
Kumho Tire shares are set to start trading on the Seoul Exchange Feb. 17. They are expected to debut there at about $13 to $15.50 per share, according to Korean stock brokerages covering the deal. With 6.8 million shares being offered, that would generate between $88 million and $105 million more.
Cooper Tire & Rubber Co. was expected to buy 7.5 million shares of the international offering to reach the 11-percent shareholding it earlier disclosed it intended to buy. Using the London launch price, Cooper's share purchase would be valued at about $110 million.
Cooper has agreed to hold its shares in Kumho for three years, after which time Cooper—subject to approval of the Bank of Korea—can offer to sell them back to Kumho, and Kumho can offer to buy them back.
The Korean Military Mutual Aid Association, which owned 50 percent of Kumho Tire prior to the Initial Public Offering (IPO), will sell 7.5 million shares to Kumho Industrial Co. Ltd., according to the brokerage reports.
Kumho Tire reportedly generated as much as $363 million earlier this month when it made its IPO to brokerages in Europe and South Korea. Kumho has not commented publicly on the reports.