Hyundai Home Shopping plans investment split ahead of merger

Hyundai Home Shopping plans to spin off its investment business on Dec. 15 under a reorganisation intended to leave the existing company focused on home-shopping operations and improve business specialisation and competitiveness through separate management structures.

The investment business targeted for separation manages investment shares, including shares in Handsome, and would be transferred to a company tentatively named Hyundai Home Shopping Holdings. That company would manage stakes in subsidiaries and investee companies, as well as investment activities, while Hyundai Home Shopping would be the surviving company in the division.

The existing Hyundai Home Shopping would retain the home-shopping business, encompassing TV and data home shopping, internet shopping malls and offline operations, while its principal activities remain TV home shopping and internet malls. The company is pursuing stronger media-commerce capabilities through Hyundai Hmall and a mobile live-shopping service.

The reorganisation aims to increase business specialisation and competitiveness by creating a decision-making structure suited to the characteristics of each business. This is expected to enable faster and more professional decisions, while independent management and objective performance evaluation are intended to establish accountable management.

Shareholders are scheduled to meet on Nov. 12, and March 31 is the reference date for calculating the division ratio. The planned division date is Dec. 15, and opposing shareholders do not have a right to demand that Hyundai Home Shopping purchase their shares.

The company will use a simple personal split, setting the new investment company's division ratio at 0.73 and the surviving company's at 0.27, with a capital-reduction ratio of 72.6 percent.

Capital for Hyundai Home Shopping Holdings would be 40.7 billion won ($28.5 million), while the surviving Hyundai Home Shopping would have 19.3 billion won ($13.5 million) after the division. Hyundai GF Holdings is the future merger partner for the new company, with completion planned before March 1, 2027.

The home-shopping operation that will remain at Hyundai Home Shopping had standalone first-quarter revenue of 2813억원, up 4.65 percent from a year earlier, as merchandise sales rose 11.21 percent to 1546억원, while commission revenue fell 4.78 percent.

At the consolidated level, first-quarter revenue was 9785억원, operating profit was 653억원 and net income was 547억원, with revenue reported for continuing operations. These group-level results sit alongside the standalone performance of the home-shopping operation that is to remain with Hyundai Home Shopping.

Apparel manufacturing and wholesale-retail was the largest contributor to the consolidated revenue total, at 4103억원 in the first quarter. Building materials generated 2267억원, whereas other electrical telecommunications and chemical-products manufacturing contributed 709억원.

Home-shopping results are on a standalone basis, while the broader company results are on a consolidated basis. That distinction separates the home-shopping business retained by Hyundai Home Shopping from the wider portfolio that includes apparel and building materials.