LG CNS Co., an information technology service company, is set to price its initial public offering at the top of its proposed price range to raise 1.2 trillion won ($821 million) in an initial public offering, according to investment banking sources on Wednesday.
Its IPO met with strong demand from some 2,000 institutional investors in bookbuilding from Jan. 9 to 15, defying the sluggish domestic stock market
A vast majority of them bid for LG CNS at the top of its price band of 61,900 won or above, said the sources.
In its second attempt to go public, LG CNS has lowered its enterprise value to 6 trillion won from the earlier estimation of 7 trillion won.
If the stock is priced at the upper end, its market capitalization will reach 6.0 trillion won in what would be a high-profile listing in South Korea this year.
LG CNS is slated to list on the Korea Exchange in early February after receiving subscriptions from retail investors on Jan. 21-22.
Its strong performance in bookbuilding was in stark contrast to the tepid response to K Bank’s IPO. Last week, the internet-only bank dropped its IPO again for a third time.
Analysts hopes LG CNS’ stock market debut to revive the IPO market.
“LG CNS’ IPO will be an important turning point for the recovery of the IPO market,” said Lee Chang-hee, an analyst at Samsung Securities.
Its IPO comprises of existing shares and new issues by 50:50.
LG Corp., the holding company of LG Group, is the IT company’s largest shareholder with a 49.95% stake, followed by Macquarie with a 35.0% stake. Macquarie acquired the shares from LG Corp., for 950 billion won in 2019.
During the IPO, the Australian bank will sell its 32% stake in LG CNS, while keeping the remainder for six months after the listing in accordance with a lock-up agreement.
LG CNS plans to acquire a foreign IT company with the proceeds from the IPO to accelerate its global expansion, according to its IPO prospectus filed last month.
By Seok-Cheol Choi and Jeong-Cheol Choi
dolsoi@hankyung.com
Yeonhee Kim edited this article.
