Shares of Hotel Shilla, operator of the country's No. 2 duty-free chain Shilla Duty Free, closed up 1.8 percent on Tuesday as investors pinned hopes on the company's stake purchase into U.S. duty-free firm DFASS.
The Samsung affiliate ended at 99,800 won ($90.30) on the Seoul main bourse, closing at its highest level since 101,000 won on Feb. 26. The KOSPI gained 0.23 percent to 2,041.37.
The share price gain comes on the heels of the company's Monday announcement of its $105 million deal to buy a 44-percent stake in the Florida, U.S.-based retailer. The deal was made public after the market closed.
In a statement, Hotel Shilla said the deal has helped the company "secure a strategic bridgehead to enter the U.S. duty-free market" and also projected the move to cut raw material costs.
Anne Lee, a retail analyst at IBK Investment & Securities, said the move will help raise the company's earnings per share by roughly 4 percent.
"In the long term, it will help increase Hotel Shilla's negotiation capacity with brands since such capacity tends to grow with business size. It has also heightened the company's bidding position in winning operational rights," she said.
Park Jong-dae of Hana Daetoo Securities said the agreement is expected to expand the duty-free operator's buying power in cosmetics, liquor and tobacco sectors given DFASS' significant presence in the U.S. market.
DFASS, which posted $518 million in sales last year, is the world's largest in-flight duty-free operator, providing service to some 27 global airlines, including Air Canada and Singapore Airlines. (Yonhap)