SK Hynix Reports 9.1% Stake In Penguin Solutions, With A Board Seat Attached
The $377,162,666 preferred-stock purchase carries director nomination rights, debt consent rights and a one-year-plus standstill.
SK hynix and two subsidiaries reported a 9.1% stake in Penguin Solutions, the AI data-center builder, in an ownership filing dated Tuesday. The position is 6,096,103 common shares issuable if convertible preferred stock is converted, and it comes with a seat at the board table.
A $377 million preferred purchase
SHIFTIX1, an indirect subsidiary of HYAICO, which is majority-owned by SK hynix, bought 200,000 shares of convertible preferred stock from Astra AI Infra for $377,162,666 in cash on October 29, according to the filing. The purchase was made under a stock transfer agreement dated July 27.
The 9.1% figure counts shares that could be issued on conversion in both the holding and the share base, which the filing puts at 60,616,641 common shares outstanding as of October 26. The preferred stock carried an accumulated stated value of $200 million and a conversion price of $32.80784 as of October 29.
The preferred pays a 6% annual cumulative dividend, in kind or in cash at Penguin's option. Penguin can force conversion after the second anniversary of December 13, 2026 if its stock trades at or above 150% of the conversion price over a 15-day trading stretch.
Board seat, debt veto, standstill
Under the investor agreement, SK hynix and its affiliates can nominate one Penguin director, or two if the board has twelve or more members. The right lasts until their holdings fall below 5.0% of the common stock, and nominees must meet the company's director qualifications.
The agreement also gives the holders information rights, consent rights over Penguin's ability to take on debt, and the right to buy new securities to preserve their ownership share.
A standstill bars them from tender offers, proxy solicitations, calling shareholder meetings, nominating rival directors or publicly proposing mergers and other extraordinary deals without consent from Penguin or a board majority, excluding the investor's designee. It runs to the later of the first anniversary of the closing date or 30 days after no investor designee sits on the board. During that period, holders of the preferred must vote as a majority of the board recommends.
The company and the stake
Penguin Solutions designs, builds and manages AI data centers, and also runs a memory-module business and an LED business. In its fiscal 2026, ended August 28, Integrated Memory brought in $924.0 million of net sales, Advanced Computing $558.8 million and Optimized LED $248.7 million. Its market value was $2.4 billion in Tuesday morning data.
The filers say they have no present plans for an acquisition or sale of Penguin securities, a merger, or changes to the board or management beyond the filing's terms. They reserve the right to change course, including buying more shares or selling some or all of the stake.
SK hynix's Korean parent holds sole power to vote and dispose of the shares, and the filing lists Chairman Tae Won Chey among the directors of both SK hynix and HYAICO.
Sources
- SCHEDULE 13D — SK hynix Inc. re: Penguin Solutions, Inc. (PENG) — SEC EDGAR
- SCHEDULE 13D Exhibit 99.3 — SEC EDGAR
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