The Korea Fund, Inc. Announces Final Results of Tender Offer

Rhea-AI Summary

The Korea Fund, Inc. (NYSE: KF) has announced the final results of its tender offer. The Fund conducted a tender offer to purchase up to 12.5% of its issued and outstanding common stock at 98.5% of its net asset value (NAV) per share. The offer, which expired on September 16, 2024, was oversubscribed.

Key results:

• Number of shares tendered: 3,196,339
• Number of tendered shares to be purchased: 604,144
• Pro-ration factor: 18.901%
• Purchase price: $26.42 per share
• Number of outstanding shares after tender offer: 4,229,009

The Fund will purchase the accepted shares promptly. Stockholders can obtain further information from EQ Fund Solutions, the Fund's Information Agent, at (877) 361-7964.

Positive

• Successful completion of tender offer to repurchase 12.5% of outstanding shares
• Oversubscribed tender offer indicates strong shareholder interest
• Purchase price of $26.42 per share, representing 98.5% of NAV

Negative

• Oversubscription resulted in pro-ration, with only 18.901% of tendered shares being accepted
• Reduction in total outstanding shares may potentially affect liquidity

Insights

Financial Analyst

The tender offer results for The Korea Fund, Inc. reveal significant investor interest, with the offer being oversubscribed. This high demand suggests strong shareholder confidence in the fund's potential or a desire for liquidity. The 18.901% pro-ration factor indicates that investors wanted to tender more shares than the fund was willing to repurchase, which could potentially lead to increased trading volume in the short term as investors who couldn't fully participate may seek to sell their shares in the open market.

The purchase price of $26.42 per share, at a 98.5% of NAV, represents a slight discount that benefits remaining shareholders. This tender offer has reduced the fund's outstanding shares by 12.5%, which could lead to improved NAV per share and potentially better market price performance. However, the reduced asset base might also increase the fund's expense ratio, impacting long-term returns.

Market Research Analyst

The oversubscription of The Korea Fund's tender offer provides valuable insights into investor sentiment towards South Korean equities and closed-end funds. This high demand could signal either bullish expectations for the Korean market or concerns about the fund's persistent discount to NAV. The tender offer's success might narrow the discount in the short term, potentially benefiting remaining shareholders.

However, it's important to consider the broader context. South Korea's market has faced challenges, including geopolitical tensions and global economic uncertainties. The fund's focus on a single country increases its vulnerability to regional risks. Investors should closely monitor how this reduced asset base affects the fund's ability to capitalize on potential opportunities in the Korean market, especially given the current global economic climate and its impact on export-driven economies like South Korea's.

NEW YORK--(BUSINESS WIRE)-- The Board of Directors (the “Board”) of The Korea Fund, Inc. (the “Fund”) (NYSE: KF) today announced the final results of its tender offer.

As previously announced, the Fund conducted a tender offer to purchase for cash up to 12.5% of its issued and outstanding common stock, at a price equal to 98.5% of its net asset value (“NAV”) per share determined on the expiration date. The Fund’s tender offer, which expired at 5:00 p.m. New York City time, on Monday, September 16, 2024, was oversubscribed.

Since the Fund’s tender offer was oversubscribed, the Fund will purchase 12.5% of its respective outstanding common shares on a pro-rata basis based on the number of shares properly tendered (Pro-Ration Factor). The final results of the tender offer are provided in the table below.

Number of Shares Tendered				Number of Tendered Shares to be Purchased				Pro- Ration Factor				Purchase Price (98.5% of NAV on Expiration Date)				Number of Outstanding Shares after Tender Offer
	3,196,339				604,144				18.901	%		$	26.42				4,229,009

The Fund will purchase the common shares that it has accepted for payment as promptly as possible. Stockholders may obtain further information regarding the Tender Offer from EQ Fund Solutions, the Fund’s Information Agent for the Tender Offer, at (877) 361-7964.

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The Korea Fund, Inc. is a non-diversified, closed-end investment company. The Fund seeks long-term capital appreciation through investing primarily in equity securities trading on the Korean stock exchanges. Its shares are listed on the New York Stock Exchange under the symbol “KF.”

JPMorgan Asset Management (Asia Pacific) Ltd is the Fund's Investment Adviser. Investment in closed-end funds involves risks. Additional risks are associated with international investing, such as currency fluctuation, government regulations, economic changes and differences in liquidity, which may increase the volatility of an investment in the Fund. Foreign securities markets generally exhibit greater price volatility and are less liquid than the U.S. market. Additionally, this Fund focuses its investments in certain geographical regions, thereby increasing its vulnerability to developments in that region. All of these factors potentially subject the Fund's shares to greater price volatility. The NAV of the Fund will fluctuate with the value of the underlying securities. Closed-end funds trade on their market value, not NAV, and closed-end funds often trade at a discount to their NAV.

The Fund’s daily New York Stock Exchange closing market price and NAV, as well as other information, including updated portfolio statistics and performance are available at www.thekoreafund.com or by calling the Fund’s stockholder servicing agent at (866) 706 0510.

Statements made in this release that look forward in time involve risks and uncertainties and are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Fund's performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

This announcement is not an offer to purchase or the solicitation of an offer to sell shares of the Fund or a prospectus, circular or representation intended for use in the purchase or sale of Fund shares.

Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919720690/en/

Contacts

Julian Reid (Chairman of the Board): +44 7768 068 200

Stockholder Servicing Agent: 866 706 0510

The Korea Fund, Inc. www.thekoreafund.com

Source: The Korea Fund, Inc.

FAQ

What was the result of The Korea Fund's (KF) tender offer on September 16, 2024?

The Korea Fund's (KF) tender offer on September 16, 2024, was oversubscribed. The Fund will purchase 604,144 shares, representing 12.5% of its outstanding common stock, at $26.42 per share (98.5% of NAV).

How many shares of The Korea Fund (KF) were tendered in the September 2024 offer?

In the September 2024 tender offer, 3,196,339 shares of The Korea Fund (KF) were tendered by shareholders.

What is the pro-ration factor for The Korea Fund's (KF) 2024 tender offer?

The pro-ration factor for The Korea Fund's (KF) 2024 tender offer is 18.901%, meaning only 18.901% of the tendered shares will be purchased due to oversubscription.

How many outstanding shares will The Korea Fund (KF) have after the 2024 tender offer?

After the 2024 tender offer, The Korea Fund (KF) will have 4,229,009 outstanding shares.