LG Display shares drop 5.4 percent on Philips stake sale
SEOUL (Reuters) - Shares in LG Display Co Ltd (034220.KS) fell more than 5 percent on Thursday after Dutch firm Philips Electronics (PHG.AS) said it sold its remaining 13.2 percent stake in the South Korean flat screen maker at a discount.
Philips said it sold 47.2 million LG Display shares in the market for 630 million euros ($809 million), as it moves away from cyclical businesses.
Sources close to the sale said the price was 25,500 to 26,000 Korean won ($17.38-$17.72) per share, a discount of up to 8 percent to the 27,700 won closing price of LG on Wednesday.
Expectations that a sizeable portion of the shares could be re-sold in the market over the coming sessions hit the stock on Thursday.
The sale, however, removes a worry that had been weighing on LG Display (LPL.N) shares for several quarters, analysts said.
"With Philips' exit, investors can now focus on LG Display's fundamentals," said Lee Jeong, an analyst at Hana Daetoo Securities. "It is inevitable that the shares are depressed due to the discount, but in the long run, this resolves an overhang."
LG Display shares were down 5.42 percent at 26,200 won in morning trade. The main stock index .KS11 was off 0.4 percent.
Philips set up LG Display jointly with South Korea's LG Electronics Inc (066570.KS) in 1999 but has steadily cut its stake in the world's No. 2 liquid crystal display (LCD) maker since late 2005.
Philips is one of the biggest customers for LG Display's LCD screens but analysts did not expect a significant impact on LG from the stake sale.
"Philips' TV business is weakening and LG Display will focus more on its growing customers, such as LG Electronics and Chinese makers," said Lee of Hana Daetoo Securities.
Officials at LG Display had no immediate comments.
(Reporting by Rhee So-eui, editing by Marie-France Han and Muralikumar Anantharaman)