UCK-MBK Consortium Pursues Acquisition of Osstem Implant... Public Tender Offer at 190,000 KRW per Share

[Asia Economy Reporter Park So-yeon] UCK (Unison Capital Korea) is pursuing the acquisition of controlling shares through a public tender offer of listed circulating shares of Osstem Implant, a KOSDAQ-listed company.

On the 25th, Osstem Implant announced that a special purpose company (SPC) 'Dentistry Investment Co., Ltd.', established jointly by private equity firm UCK and MBK Partners (hereinafter referred to as the UCK consortium) for investment purposes, will conduct a public tender offer in the securities market to acquire Osstem Implant.

The tender offer price is KRW 190,000 per share, which applies a premium of 40% and 51% respectively to the volume-weighted average price (VWAP) of KRW 135,631 and KRW 125,948 for the one-month and three-month periods prior to the tender offer date.

This price is 17% higher than the closing price on the 20th and 16% higher than the 52-week high of KRW 162,800. It is also at the same level as the highest target price suggested by major securities firms.

The shares subject to the Osstem Implant tender offer include the currently issued common shares (15,006,672 shares) and newly issued common shares (569,833 shares) that would be issued if all outstanding convertible bonds are converted into shares, totaling 15,576,505 shares. From this, treasury shares held by the company (939,469 shares), shares owned by the largest shareholder Chairman Choi Kyu-ok (2,943,718 shares), and shares to be issued upon conversion of convertible bonds acquired through the exercise of the convertible bond put option by the tender offeror (516,315 shares) are excluded, resulting in a total of 11,177,003 shares. The planned purchase quantity ranges from a minimum of 2,394,782 shares (15.4% of the potential total issued shares) to a maximum of 11,177,003 shares (71.8% of the potential total issued shares). The tender offer period is from January 25 to February 24 (settlement date February 28).

In other words, if at least 2,394,782 shares, which is 15.4% of the company's potential total issued shares, respond to the tender offer, the tender offer will be considered successful.

UCK, established in 2012, is a domestic private equity fund manager operating blind funds funded by major domestic institutional investors such as the National Pension Service and the Teachers' Pension. It specializes in mid-cap buyouts that improve corporate value by acquiring controlling stakes in mid-sized companies, and has successful cases of acquiring promising Korean companies such as Gongcha and Medit and expanding them into global markets.

It is known that UCK has proposed and discussed the acquisition of controlling shares with Chairman Choi Kyu-ok, the founder and largest shareholder of Osstem Implant, to fundamentally reform the company's governance and improve internal control systems since the trading suspension incident of Osstem Implant.

To ensure the stable success of this tender offer, UCK formed a consortium with MBK Partners, the largest private equity firm in Northeast Asia, and selected NH Investment & Securities as the financing partner to build a united front.

MBK Partners has been actively expanding investments in healthcare and dental industries, recently acquiring 'Medit' for KRW 2.4 trillion. MBK Partners' abundant financial resources and overseas networks established in China, Japan, and North America are expected to support Osstem Implant's long-term growth.

Meanwhile, prior to the public tender offer announcement, on the 21st, the UCK consortium signed a stock purchase agreement and investment agreement to purchase 1,442,421 common shares owned by Chairman Choi (approximately 9.3% of the potential total issued shares) at the same price as the tender offer price, out of his total 2,943,718 shares (approximately 18.9% of the potential total issued shares).

If the tender offer succeeds, the UCK consortium will become the largest shareholder of the company, and Chairman Choi Kyu-ok will remain the second-largest shareholder with a 9.6% stake.

Capital market insiders forecast, "This tender offer is an unusual case where the controlling shareholder premium, typically applied when acquiring the largest shareholder's stake, is equally offered to all minority shareholders, and since only 15.4% or more of the total issued shares need to respond to the tender offer, the likelihood of success is quite high."

They also said, "The UCK consortium's acquisition of controlling shares will be a major turning point in the governance reform of Osstem Implant, which the market and investors have demanded. For existing investors disappointed by compliance issues such as embezzlement incidents, this is an excellent opportunity for successful investment recovery and profit realization, and for Chairman Choi Kyu-ok, it is a clever move to restore his and the company's honor through bold decisions."

Osstem Implant shareholders wishing to participate in the tender offer should apply to sell their shares to the designated securities firm NH Investment & Securities by the tender offer period deadline of February 24.

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