BATTLE ROYALE FOR K-POP DEAL IN KOREA
JPMorgan Korea is threatening the dominance of Citigroup Global Markets Korea Securities in the domestic initial public offering (IPO) market with its involvement as lead underwriter in various mega-deals following a three-year hiatus, according to industry officials, Wednesday.
One of the largest deals JPMorgan is involved in is the listing of Big Hit Entertainment, the agency behind the K-pop phenomenon BTS, according to Korea Times.
JPMorgan is one of the lead underwriters with Korea Investment & Securities (KIS) and NH Investment & Securities, while Mirae Asset Daewoo is serving as a co-underwriter.
Citigroup had reportedly received a request for proposal (RFP) from Big Hit in February, but it failed to become the lead underwriter.
The entertainment agency is expected to list on the benchmark KOSPI this year, after the Korea Exchange granted preliminary approval for the IPO this month. Big Hit's valuation after the IPO is estimated to be up to 6 trillion won ($5 billion).
Another big deal JPMorgan is involved in is the listing of SK IE Technology (SKIET), an SK Innovation subsidiary that makes core components for electric vehicle batteries and flexible displays.
JPMorgan and Mirae Asset were chosen as the lead underwriters for the IPO, while KIS and Credit Suisse were selected as co-underwriters.
Citigroup had reportedly participated in a bid to become an underwriter, but did not succeed.
SK Innovation wants to list SKIET on the KOSPI during the first half of next year at the earliest. Industry officials estimate the valuation of the materials supplier will be around 5 trillion won.
JPMorgan had rarely been involved in large IPO deals on the Seoul bourse since 2017, when it served as the lead underwriter for the listing of Netmarble Games, worth 10 trillion won.
During the hiatus, Citigroup consolidated its position as the leading foreign securities firm in the Korean IPO market. It was involved in several big deals, including the IPOs of Hanwha Systems and SK Biopharmaceuticals.
After hiring Ha Jin-soo as head of its Korean equity capital market (ECM) from NH, however, JPMorgan has again expanded its presence in the domestic IPO market.
Dubbed the "queen of deals" for her communication skills, Ha used her personal networks to help JPMorgan become the lead underwriter for the listing of HK inno.N, which was formerly CJ HealthCare before Kolmar Korea's acquisition of it.
When she was working at NH, she persuaded CJ HealthCare officials to select the firm as the lead underwriter for its IPO.
Although their contract was nullified after CJ Group sold the pharmaceutical company to Kolmar Korea in 2018, Ha's partnership with CJ HealthCare is considered to have contributed to JPMorgan becoming the lead underwriter for the HK inno.N IPO. The valuation of HK inno.N, which seeks to go public during the first half of next year, is estimated at over 2 trillion won.