Overview
- Bookbuilding for the roughly $28 billion American depositary receipt offering was reported multiple times oversubscribed and set to close on Wednesday with final pricing to be fixed on Thursday and Nasdaq trading slated to begin around July 10.
- The deal would issue ADRs equal to about 17.79 million common shares with a structure of 10 ADRs per one Seoul-listed share and a reference price of 242,500 won per ADR in filings.
- Underwriters said U.S. institutions placed large orders, some above $1 billion, and anchor interest from Baillie Gifford, Coatue and Situational Awareness Partners has been signalled for up to about $7 billion of the offering.
- Banks including UBS have advised clients to buy the new ADRs and sell the Seoul-listed line because ADR holders can cancel into Seoul shares while converting Seoul shares into ADRs may need Korean regulatory approval, a dynamic that can create a persistent U.S. premium.
- SK Hynix plans to use proceeds for wafer fabs, advanced packaging and EUV tools to boost HBM output for customers such as Nvidia and Google but execution risks include SEC mechanics, a disclosed U.S. antitrust suit, limited EUV tool supply and the challenge of ramping yields at new factories.