Superior Essex headquarters building in Atlanta, the US (Courtesy of Superior Essex)
Superior Essex Inc. (SPSX), the world’s top magnet wire provider under South Korea’s LS Group, is mulling an initial public offering at its Korean parent’s home more than 15 years after it left the US Nasdaq market.
According to sources in the investment banking industry on Wednesday, the Atlanta-based cable supplier is looking into an option to go public in Korea’s main Kospi bourse.
The US largest cable manufacturer was acquired by Korea’s leading electric power, materials and energy conglomerate LS in 2008 in a deal, in which the latter agreed to pay shareholders of then-Nasdaq-listed Superior Essex $45.00 per share in cash, a 50% premium over the year-to-date-average closing prices of its common stock.
After the takeover, Superior Essex was delisted from the US market but has pursued a return to the Nasdaq market until last year.
SOUR INVESTOR SENTIMENT IN THE US
But the IPO market condition for cable companies in the US has turned negative, with the country’s leading telecom stock AT&T Inc. inching up a mere 5.4% through a whole year. Requirements to go public in the US market are also more complicated than those in the Korean market.
LS Group Chairman Koo Ja-eun (center) at InterBattery 2024 held at COEX in Seoul in March
The Korean IPO market, however, has been on the recovery track since late last year, unleashing more listing opportunities.
LS Group’s energy storage device-making subsidiary LS Materials Co. has tripled since its debut in Korea’s junior Kosdaq market in December last year, while HD Hyundai Marine Solution Co. valued at 3.78 trillion won ($2.8 billion) made a blockbuster debut earlier this month in the main Kospi bourse.
Considering that LS Corp.’s Chairman Koo Ja-eun said at Korea’s leading battery exhibition InteBattery 2024 in March that the group was seeking to list one or two more affiliates between LS E-Link and LS MnM IPOs, the US unit is floated as a strong candidate to go public before LS MnM, said sources.
LS Corp. is LS Group’s holding company controlling Korea’s top wire and cable producer LS Cable & System Ltd., LS Electric Co. and global leading smelter LS MnM Inc. and LS Mtron Co.
DRAG-ALONG RIGHT
Superior Essex should complete its IPO by 2026 because LS raised funds from Korean private equity firm SKS Credit Co. in August last year in a pre-IPO deal giving the investor the drag-along right, which can force the sale of Superior Essex shares to a third party if the US unit fails to go public until 2026.
LS Group headquarters building in Seoul
Against this backdrop, brokerage firms are in talks with LS Group to tap Superior Essex’s IPO in Korea, said an official from the Korean securities industry.
Superior Essex is the world’s largest producer of magnet wire and a leader in the North American communications cable market.
In March, it joined the US government’s 55 trillion won project to build high-speed communication networks.
It has also jumped into the EV motor magnet wire market after fully taking over the minority interest held by Furukawa Electric in the Essex Furukawa Magnet Wire joint venture in the same month.
Superior Essex reported $1.5 billion in sales in 2023.
By Jeong-Cheol Bae
bjc@hankyung.com
Sookyung Seo edited this article.
