South Korea’s Hotel Lotte Co Ltd is planning a share sale worth up to 5.7 trillion won ($4.85 billion) next month, in what would be the world’s biggest initial public offering since late 2015. The listing is seen as part of the efforts by the group to simplify its ownership structure following a family feud over succession.
Shin Dong-bin, the youngest son of 93-year-old founder Shin Kyuk-ho and CEO of the companies that are Hotel Lotte’s main shareholders, cemented control of the group in August last year, with the support of shareholders in a key Japan-based holding company. Older brother Shin Dong-joo is engaged in legal proceedings seeking to wrest control. This IPO will test investors’ willingness to overlook corporate governance concerns at this family-run conglomerate.
Hotel Lotte, which operates the largest hotel group in Kora and the world’s third biggest duty-free shop, plans to use the funds to expand its duty-free business at home and abroad. The duty free business currently accounts for 86% of the revenues of the group and the company plans to become the biggest largest duty-free operator in the world.