By Kwanwoo Jun
LG Energy Solution Ltd. has priced its $10.74 billion initial public offering at the top end of its guidance range, launching South Korea's largest-ever share sale.
The company, which supplies electric-vehicle batteries to Tesla Inc., General Motors Co. and Hyundai Motor Co., is selling shares at 300,000 won ($252.79) each. It is looking to raise KRW12.750 trillion, which would comfortably eclipse the previous IPO record of KRW4.9 trillion set by Samsung Life Insurance Co. in 2010.
The IPO pricing implies a market capitalization at KRW70.2 trillion that would make LG Energy the third-biggest listed company in South Korea.
The Jan. 11-12 bookbuilding showed strong investor demand, with the order book for institutional investors 2,023 times oversubscribed, LG Energy said.
Some analysts think that even at $59.15 billion, LG Energy's valuation looks low given how closely it trails the world's top battery maker, Contemporary Amperex Technology Co., in terms of market share. The Chinese company was recently valued at $213 billon.
LG Energy plans to invest KRW8.8 trillion of the IPO proceeds to boost its electric-vehicle battery output, Chief Executive Kwon Young-soo said earlier this week.
Mr. Kwon aims to raise annual EV battery production capacity to 400GWh by 2025 and overtake CATL.
LG Energy and parent LG Chem Ltd. plan to sell a combined 42.5 million shares, including 34 million new and 8.5 million existing shares.
The company plans to start taking orders from retail investors on Jan. 18-19 before listing on Jan. 27.
BofA Securities, Citigroup and Morgan Stanley are advising LG Energy on the share sale.
Write to Kwanwoo Jun at firstname.lastname@example.org
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