MBK Pursues Acquisition of Korea Tire Holding Company Management Rights... Public Tender Offer at 20,000 KRW per Share

MBK Partners to Launch Tender Offer for Korea & Company at 20,000 KRW per Share
Special Situations (MBKP SS) Initiates Tender Offer to Improve Corporate Governance
Aiming to Secure Over Approximately 20.35% of Korea & Company’s Total Issued Shares
Upon Successful Tender Offer, Control Voting Rights Over 50% Including Major Shareholders’ Stakes
"Committed to Enhancing Corporate Value Through Establishing Corporate Governance and Introducing Professional Management System"

MBK Partners Special Situations (hereinafter MBKP SS) is promoting corporate governance improvement through a public tender offer of listed circulating shares of Korea & Company, the business-type holding company of Hankook Tire & Technology (hereinafter Hankook Tire).

On the 5th, Ventue Co., Ltd., a special purpose company (SPC) related to MBKP SS's tender offer, announced through a disclosure that it will conduct a public tender offer for Korea & Company shares on the KOSPI market for the purpose of M&A to improve corporate governance.

The tender offer price is 20,000 KRW per share, which applies a premium of 41% and 55% over the weighted arithmetic average prices of 14,187 KRW and 12,887 KRW for the one-month and three-month periods prior to the tender offer date, respectively. It is also 19% higher than the closing price of 16,820 KRW on the last business day before the tender offer announcement, December 4.

The shares subject to the Korea & Company tender offer amount to approximately 27.32% of the total issued shares (94,935,240 shares), which is 25,934,385 shares. The minimum target quantity for the tender offer is about 20.35% of the total issued shares, or 19,315,214 shares, and the maximum quantity is about 27.32%, or 25,934,385 shares.

If the number of shares tendered is less than the minimum purchase quantity, the tender offeror will not purchase any of the tendered shares. Conversely, if the number of shares tendered exceeds the maximum purchase quantity, the tender offeror plans to purchase shares on a pro-rata basis within the range of the target shares, and the tender offer payment will be made in cash.

According to the tender offer report, the tender offeror entered into a shareholders' agreement on November 30, prior to the tender offer announcement, with key shareholders of Korea & Company, Advisor Cho Hyun-sik and Mr. Cho Hee-won, regarding the exercise of rights related to the tender offer and held shares.

According to the shareholders' agreement, the parties agreed not to jointly exercise voting rights (including the authority to instruct the exercise of voting rights) directly or indirectly with the largest shareholder and its special related parties (excluding Advisor Cho Hyun-sik and Mr. Cho Hee-won) without the consent of the other party under any circumstances. Advisor Cho Hyun-sik and Mr. Cho Hee-won also agreed not to dispose of their shares to a third party without the consent of the tender offeror.

Furthermore, if shares exceeding the minimum purchase quantity are tendered and the tender offeror secures voting rights over more than 50% of the shares including those held by major shareholders, the tender offeror will nominate more than half of the total number of directors of Korea & Company, and Advisor Cho Hyun-sik and Mr. Cho Hee-won will nominate the number of directors equal to the total number of directors minus the number nominated by the tender offeror minus one.

The CEO of the target company will be nominated by mutual agreement among the contracting parties, but if no agreement is reached, the tender offeror will nominate the CEO. The majority of the members of the Outside Director Candidate Recommendation Committee and the Personnel Committee (to be newly established) within Korea & Company's board of directors will be nominated by the tender offeror.

Advisor Cho Hyun-sik and Mr. Cho Hee-won have also established a pledge on the Korea & Company shares they own as collateral to secure all liabilities to the tender offeror, including damages for breach of the shareholders' agreement.

Advisor Cho Hyun-sik owns 17,974,870 common shares of Korea & Company (approximately 18.93% of the total issued shares), and Mr. Cho Hee-won holds 10,068,989 shares (approximately 10.61% of the total issued shares).

If the tender offeror secures at least 19,315,214 shares, about 20.35% of the total issued shares, through this tender offer, it will hold between 50.0% and 57.0% of Korea & Company's total issued shares excluding treasury shares. This will enable the tender offeror to acquire voting rights for corporate governance improvement of Korea & Company, thereby making this tender offer successful.

The tender offer period is 20 days from December 5, and since the 20th day falls on Sunday, December 24, subscriptions can be made until December 22. The settlement date is December 27.

An MBKP SS official stated, "If the tender offer succeeds and voting rights over more than 50% of the shares are secured, we will restore corporate governance properly and introduce a professional management system to immediately enhance Korea & Company's corporate value."

Capital market insiders explained, "This tender offer may be the last opportunity for minority shareholders, who have not been able to do so for various reasons, to recover their investments and realize profits at a price reflecting a premium over the market price."

Korea & Company shareholders wishing to participate in the tender offer should apply to sell their shares to the designated securities company, Korea Investment & Securities, by the end of the tender offer period on December 22, based on the transaction date.

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