SeAH Holdings speeds up shareholder returns with tender offer

SeAH Holdings CI

SeAH Holdings is stepping up efforts to narrow the chronic discount applied to holding companies by launching a large-scale tender offer for its own shares, signaling an accelerated push to boost shareholder value.

The South Korean steel holding company said Tuesday it will spend 30 billion won ($20.3 million) to repurchase 187,000 common shares through a tender offer. The offer price was set at 160,000 won per share, representing a 10.9 percent premium to the previous day‘s closing price.

The buyback amounts to roughly 4.4 percent of SeAH Holdings’ common shares outstanding. By reducing the number of shares available on the market, the company expects to improve metrics such as earnings per share and net asset value per share for remaining investors.

Unlike ordinary market purchases, tender offers involve predetermined pricing and acquisition periods approved by the board, making them a more credible and enforceable shareholder return measure in the eyes of investors.

The move is drawing attention in the capital market because SeAH Holdings has been executing its previously announced corporate value enhancement plan at a faster-than-expected pace. Market watchers say the initiative reflects the strong commitment of Lee Tae-sung, CEO of SeAH Holdings and a third-generation member of the SeAH Group founding family, to address the persistent undervaluation of holding companies.

When SeAH Holdings first unveiled its value-up plan in November 2024, it pledged shareholder returns totaling 25 billion won by 2026. The company later decided to fully acquire and delist SeAH Besteel Holdings affiliate SeAH Special Steel in an effort to eliminate the so-called “double listing discount” that often weighs on Korean conglomerate holding firms.

As part of that restructuring, SeAH Holdings issued new shares to raise the ownership stake held by ordinary shareholders from 9.3 percent to 16 percent, seeking to improve historically weak trading liquidity. It also committed to repurchasing and retiring 50 billion won worth of treasury shares between 2026 and 2028.

The company’s shareholder return roadmap has gained momentum this year. In March, SeAH Holdings approved the retirement of 71,000 common shares worth about 11.6 billion won, and the latest tender offer will raise the total size of treasury-share measures announced within two months to 41.6 billion won.

That means the company has already completed more than 80 percent of its previously announced three-year, 50 billion won shareholder return target during the first half of this year.

“A stable and sustainable shareholder return policy over the long term is important,” a SeAH Holdings official said. “We will continue to review various options, including additional share buybacks and cancellations.”

Investors also interpret the tender offer as a sign of confidence in the company’s expansion into high-value businesses such as aerospace specialty alloys, highlighted by its entry into the supply chain of SpaceX.

Park Kwang-rae, an analyst at Shinhan Securities, said SeAH Holdings is moving beyond the image of a traditional steel-focused holding company and shifting its portfolio toward aerospace and defense metal materials.