SK innovation stock rise point to smooth merger with SK E&S

The planned merger between SK innovation and SK E&S is expected to proceed smoothly as SK innovation’s stock price surpassed the set buyback price. The deadline for exercising the stock buyback rights via securities firms passed at the halfway point of the buyback threshold. Even on Thursday, when SK innovation accepted direct requests, the demand for buybacks remained low.

SK innovation’s stock closed up 1.81 percent at 112,700 won ($84.80) on Thursday, exceeding the buyback price of 111,943 won. The stock hit a high of 112,900 won during the session, fluctuating around the set buyback price. While the stock dropped to the 90,000 won range earlier in August 2024, it hovered around the 110,000 won mark after the stock buyback rights period began on August 28th.

According to the Korea Securities Depository (KSD) and SK innovation, shareholders had exercised stock buyback rights worth about 330 billion won by September 13th, the last trading day before the Chuseok holiday. Although shareholders could still exercise their buyback rights until September 19th, the deadline for requesting through securities firms was September 13th, leaving little incentive for further buybacks.

The total amount of buyback requests submitted directly to the company by the 19th largely did not exceed 330 billion won. The company initially set a buyback limit of 800 billion won, but the final buyback amount fell far short of this figure, reaching only half of the threshold.

With the buyback volume, once considered a major hurdle to the merger, lower than expected, the merger between SK innovation and SK E&S is likely to proceed without issue. The newly integrated SK innovation is set to launch on November 1st, 2024.