* Samsung SDS surges to 197,500 won in OTC market, valuing
the firm at 15 tln won
* Shares of shareholders Samsung C&T, Samsung Elec-Mech jump
* To select IPO lead managers this month
(Adds comments from analysts, context)
By Miyoung Kim and Joyce Lee
SEOUL, May 8 Samsung SDS, the IT solutions
affiliate of Samsung Group, is planning a listing this
year, signalling further restructuring of family ownership in
South Korea's biggest conglomerate.
Samsung SDS said on Thursday that it would decide on the
size of the share offering after it chooses lead advisors this
The share sale could be the biggest IPO in South Korea this
year, as many firms have withdrawn their listing plans due to a
weak stock market.
The surprise IPO plan comes less than six months after
Samsung SDS bought unlisted network solution provider Samsung
SNS, which was then 45.69 percent-owned by Jay Y. Lee, son of
Samsung Electronics Co Ltd Chairman Lee Kun-hee. SDS
itself is partly owned by Jay and his two sisters.
"This signals acceleration of ownership changes, and the
listing of SDS could be aimed at financing the changes," said
Lee Sang-hun, an analyst at HI Investment & Securities.
The IPO would give Lee's children an opportunity to generate
funds which they can use to invest in other key Samsung
companies where they have virtually no stakes.
Many analysts say the children now have a chance to tighten
their grip in companies such as construction unit Samsung C&T
Corp. The Lee family also owns less than 5 percent
of the crown jewel - Samsung Electronics.
The three Lee children will stand to make some good
investment gains, analysts also say.
Prior to Samsung SDS's acquisition announcement of SNS in
September, SDS stock was worth around 83,000 won apiece in the
over-the-counter market. The stock has since more than doubled
to 197,500 won, valuing the company at around 15 trillion won
and Jay Y. Lee's SDS stake at 1.3 trillion won.
Lee's two sisters Boo-jin and Seo-hyun, who each owns 3.9
percent of SDS, will also stand to make a windfall.
The next round of restructuring within the Samsung Group is
more likely to focus on the construction business, which is
scattered among three companies Samsung C&T, Samsung Engineering
Co and Samsung Everland, analysts said.
Samsung C&T is widely expected to lead the construction
business restructuring. The listing of SDS will value Samsung
C&T's 17.08 percent stake in the IT solution firm at 2.6
trillion won, they said.
Samsung Everland is also closely watched as the de facto
holding company increased its enterprise value by taking over
Cheil Industries Inc's fashion business last year
and may go public to allow the Lee family to monetize their 45.6
The latest restructuring also includes the acquisition of
Samsung Petrochemical by unlisted Samsung General Chemicals.
($1 = 1022.5500 Korean Won)
(Additional reporting by Hyunjoo Jin and Changho Lee; Editing
by Stephen Coates and Ryan Woo)