The stock tender offer attempted by the private equity fund MBK Partners in collaboration with the eldest son, advisor Cho Hyun-sik, to acquire management rights to Korea & Company failed.
On the 22nd, MBK announced that it would not make a tender offer, saying, “Significant (tender offer) subscriptions were received by today, which is in fact the deadline for tender offer applications, but the (minimum purchase) target was not reached.” Initially, MBK said it would not buy a single share of the submitted shares unless the stake participating in the tender offer exceeded 20.35%. As a result, the ‘brothers’ rebellion’ that Korea & Company advisor Cho Hyun-sik, the eldest son of Korea & Company honorary chairman Cho Yang-rae, started on the 5th in cooperation with private equity funds ended in failure after 17 days.
From the beginning, there was a strong expectation in the market that MBK’s tender offer would end in failure. The initial tender offer price (20,000 won) was not very high, so at the beginning of the subscription, the market price exceeded the tender offer price and did not attract the attention of investors. The public offer price must be higher than the market price to attract individual investors looking for profit, but there was no such incentive.
Moreover, as the second son, the current group chairman, Cho Hyun-beom, gained an early victory thanks to the support of his father, honorary chairman, Cho Yang-rae, the public offer was not able to heat up any more. On the 11th, Honorary Chairman Cho used 57 billion won of his personal funds to purchase 2.72% of Korea & Company stock and supported Chairman Cho Hyun-beom, leading to the spread of the interpretation that the management dispute was virtually over. In response, MBK launched a counterattack by raising the tender offer price to 24,000 won, but was unable to change the mood. Since then, the stock price has remained in the 17,000 won range, which is lower than the public offer price, and trading ended at 16,380 won on this day as well. Current Chairman Cho Hyun-beom is known to have secured a total of 47.19% of the stock, including friendly shares such as Hyosung Advanced Materials (0.75%), as of today.
MBK said, “Improving corporate governance is more important than anything else, so we will continue to monitor it in the future.” It was also interpreted to mean that there may be additional attempts to take over management rights while keeping an eye on the situation at Korea & Company in the future.
2023-12-22 18:03:54
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