South Korea's AI chip investor announces plan for share buybacks (updated)

SK Square Co

21/11/2024 07:41

(Add background from paragraph 4)
       SEOUL, Nov 21 (Reuters) - SK Square  402340.KS , the
holding company of SK Hynix  000660.KS , a maker of artificial
intelligence chips, on Thursday announced a plan to buy back
shares and nominate an independent director as part of efforts
to boost shareholder value.  
    The plan came after London-based hedge fund Palliser Capital
this year proposed changes to address the undervaluation of the
company and South Korea's government has implemented a
"Value-Up" programme to bolster stock prices. 
    SK Square said it plans to cancel 100 billion won ($71.51
million) worth of shares that it had bought back in April, while
planning to repurchase another 100 billion won worth of shares
within the next three months and cancel those shares. 
    It also announced other measures to boost the value of the
company, which holds a 20% stake in SK Hynix, a South Korean
firm that posted a record quarterly profit thanks to booming AI
chip demand from customer Nvidia. 
    SK Square's market value is less than half the $18 billion
value of the stake it holds in SK Hynix.  
        Palliser Capital acquired a 1% stake in the company this
year, a person familiar with the matter told Reuters, adding
that the two have had talks on enhancing shareholder returns. 
  
    This year, the Korea Exchange, a securities exchange
operator in the country, launched a new stock market index
comprised of listed companies making an effort to raise market
value, hoping to give companies an incentive to follow the
government’s initiative.

 (Reporting by Hyunjoo Jin and Jack Kim; additional reporting by
Cynthia Kim
Editing by Ed Davies)
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net))