KCGI "Will Respond to Ostem Implant Tender Offer"

No Grounds Found to Oppose Tender Offer
Criticism of Non-controlling Shareholders' Exclusion Under Controlling Shareholder's Exclusive Management Premium

[Asia Economy Reporter Hwang Yoon-joo] Kang Sung-bu, CEO of KCGI, has decided to respond to Ostem Implant's tender offer.

Kang Sung-boo, CEO of KCGI (center), is answering questions at a press conference held by the shareholder coalition for the normalization of Hanjin Group at the Glad Hotel in Yeouido, Yeongdeungpo-gu, Seoul on the 20th. Photo by Hyunmin Kim kimhyun81@

On the 10th, KCGI stated, "We will respond to the tender offer by Dentistry Investment Co., Ltd. (Dentistry)," adding, "It would be against the duty of care to investors to make them bear the risk of potential stock price decline or delisting by not responding to the tender offer."

CEO Kang decided to accept the tender offer because he judged there was no reason to oppose it. According to current law, if Dentistry secures enough shares through this tender offer to enable a special resolution at the shareholders' meeting, it can proceed with the delisting process. This is possible by making Ostem Implant a wholly owned subsidiary through a comprehensive stock exchange involving payment of consideration.

The possibility that the company might choose an exchange timing favorable to the controlling shareholder or offer the remaining shareholders a consideration price lower than the tender offer price also influenced the decision. Representative cases of comprehensive stock exchanges include Hanwha Galleria Timeworld, Kolmar Pharma, and Busan City Gas.

KCGI explained, "There is a possibility that general shareholders who trusted KCGI and did not respond to the tender offer may suffer losses due to the consideration price being lower than the tender offer price."

However, KCGI pointed out the need for improvements in the current system, where the controlling shareholder monopolizes the management premium and non-controlling shareholders are forcibly expelled from the company.

KCGI emphasized, "It is not illegal for Dentistry to make Ostem Implant a 100% subsidiary by utilizing the current Commercial Act system," adding, "In advanced capital markets, to prevent general shareholders from being unfairly discriminated against during the transfer of management rights by the controlling shareholder, mandatory tender offer systems, Majority of Minority consent systems, or case law principles such as the fiduciary duty of controlling shareholders are applied to protect the rights and interests of general shareholders."

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