EQT sells Shinhan Financial stake in block deal at 30% IRR

EQT Private Capital Asia sold 415.5 billion won ($311.9 million) worth of shares in South Korea’s Shinhan Financial Group Co. in a block deal on Thursday, achieving a 30% internal rate of return.

The Asian investment arm of EQT AB, a Sweden-based global asset manager, divested 9.3 million Shinhan shares at 44,688 won apiece which was discounted by 2% from the stock’s closing price on March 6, banking sources said on Thursday.

The sale, initially set up at a 2-4% discount, was completed at the lowest discount rate in the country’s block deal history as it was 10 times oversubscribed by institutional investors.

EQT Private Capital Asia realized the capital gain by divesting all Shinhan shares it held as the financial group’s stock jumped after the Korean government announced basic guidelines last month to increase the country’s undervalued stocks.

Shinhan’s stock has increased 9.8% to finish at 45,400 won on Thursday since Feb. 26 when the government released the guidelines.

Baring PEA, which was acquired by EQT Group in 2022, bought a 3.62% stake in Shinhan for 553 billion won in 2020. Baring purchased 18.7 million shares at 29,600 won apiece at the time.

The private markets firm has divested the stake through intraday trading to decrease its holdings to 1.8%.

Affinity Equity Partners, which acquired a 3.96% stake in Shinhan for around 600 billion won in 2020, decreased its holding to less than 2% through two block deals earlier this year. Together with Baring PEA, Affinity also bought Shinhan shares at 29,600 won apiece and sold them at more than 40,000 won per share.

Write to Ji-Eun Ha at hazzys@hankyung.com

Jihyun Kim edited this article.