Shareholder Opposition Leads to Final Collapse... Hyundai Department Store "No Plans to Reattempt" (Comprehensive)

Hyundai Department Store's Holding Company Conversion Rejected with 64.9% Approval
Planned Implementation of Spin-off Postponed Due to Failure

Hyundai Department Store Apgujeong Main Branch exterior view (Photo by Hyundai Department Store).

Hyundai Department Store announced on the 10th that it will halt its transition to a holding company system following the rejection of the proposed spin-off plan at the extraordinary general meeting of shareholders, stating that it "humbly accepts the result."

At the extraordinary general meeting held that morning at the Hyundai Department Store Group Talent Development Center in Gangdong-gu, Seoul, the agenda item for "approval of the spin-off plan" was narrowly rejected, falling short of the special resolution quorum required for the shareholders' meeting. Although two-thirds (66.6%) of the attending shareholders needed to approve, only 64.9% voted in favor.

On September 16 of last year, Hyundai Department Store's board of directors resolved to spin off its investment and business divisions to transition to a holding company system. The plan centered on establishing Hyundai Department Store Holdings as the holding company and designating Hyundai Department Store as the surviving company after the spin-off. Hyundai Department Store Holdings would control Hanmu Shopping and Hyundai Department Store, while Hyundai Department Store would oversee Zinus and the duty-free shops.

Hyundai Department Store stated, "Through the transition to a holding company system via the spin-off, we aimed to overcome the long-standing growth limitations of the department store business and ultimately enhance corporate and shareholder value."

However, ahead of the extraordinary shareholders' meeting, concerns grew among shareholders regarding the owner's strengthened control through treasury stock and potential shareholder value erosion due to the separation of Hanmu Shopping affiliates. Hanmu Shopping has served as a 'cash cow,' generating annual operating profits of around 100 billion KRW through six stores, including Trade Center Branch, Mokdong Branch, and Kintex Branch. Some shareholders also expressed skepticism about plans to expand synergy with Zinus, which would remain a subsidiary of the surviving company, Hyundai Department Store.

In response, Hyundai Department Store announced on the 31st of last month a shareholder return policy that includes treasury stock cancellation and an expanded dividend policy following the spin-off, alongside governance restructuring. Hyundai Department Store said, "While many shareholders agreed with this plan and supported the spin-off, there were also critical opinions from some market participants and shareholders," and "We humbly accept the results of this extraordinary shareholders' meeting and have decided to halt the transition to a holding company system through the spin-off that had been pursued. We also apologize that the spin-off plan and shareholder return policy, which were carefully promoted considering market concerns, did not gain sufficient support from shareholders."

Following the rejection of the spin-off plan at the extraordinary shareholders' meeting, Hyundai Department Store stated that it will not proceed with the spin-off or any plans contingent on it and has no plans to reinitiate the transition to a holding company system through a spin-off in the future.

Meanwhile, Hyundai Green Food, which resolved a spin-off plan at its board meeting on September 16 last year, had its "approval of the spin-off plan" agenda item finally passed at its extraordinary shareholders' meeting held on the same day. Hyundai Green Food will continue to pursue the transition to a holding company system through the spin-off.

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