Minor Shareholders Protest... CJ ENM Temporarily Halts Physical Division

[Asia Economy Reporter Ji Yeon-jin] CJ ENM has temporarily suspended its plan to spin off its content production division and establish a subsidiary. This move is seen as a response to the decline in stock prices and growing opposition from minority shareholders following the announcement of the physical spin-off plan for the content division last November.

According to the investment banking (IB) industry on the 9th, CJ ENM continues to plan the establishment of a second Studio Dragon, but has decided to revise the studio establishment plan due to shareholders' concerns about the physical spin-off and the rapidly changing regulatory environment. The company stated that it prioritizes shareholders' interests and strengthening the competitiveness of CJ's content business.

Currently, CJ ENM operates through the entertainment division, which handles content production and distribution, and the commerce division, which runs the home shopping business. CJ ENM shareholders have expressed concerns that the company's competitiveness would weaken if the content division were to be spun off physically. In fact, CJ ENM's stock price, which was in the 190,000 KRW range at the end of October last year, dropped to the 120,000 KRW range as of this date. Going forward, CJ ENM is expected to consider alternatives such as a corporate spin-off or establishing a separate new content corporation instead of a physical spin-off.

Previously, in November last year, CJ ENM announced plans to establish a new corporation through a physical spin-off to build a multi-studio system for content production targeting the global market and to maximize revenue businesses such as intellectual property (IP) distribution.

This content was produced with the assistance of AI translation services.