Korea & Company Management Dispute Intensifies... Eldest Daughter Jo Hee-kyung Supports Public Tender Offer

Eldest Daughter Chairman Jo Hee-kyung Expresses First Position After Management Rights Dispute
MBK Partners Raises Tender Offer to 24,000 Won
Management Rights Dispute Prolonged... Future Remains Uncertain Again

The management dispute at Hankook & Company is escalating rapidly. Following MBK Partners' increase in the tender offer price on the 15th, Cho Hee-kyung, the eldest daughter of Cho Yang-rae, Honorary Chairman of Hankook & Company Group and Chairwoman of the Hankook Tire Sharing Foundation, also expressed her support for the tender offer.

On the 17th, Chairwoman Cho stated in a press release, "I believe the initial cause of this dispute was Cho Hyun-beom (Chairman of Hankook & Company Group)," and added, "I am convinced that my father's (Honorary Chairman Cho's) recent actions were not based on his own judgment." This is the first time the eldest daughter, Chairwoman Cho, has officially expressed her position regarding the management dispute.

She continued, "We must correct the exploitation of an unhealthy father for selfish gain," and added, "Therefore, I have decided to support the positions of my younger brothers, Cho Hyun-sik and Cho Hee-won, to improve the governance structure of Hankook & Company."

Chairwoman Cho currently holds a 0.81% stake in Hankook & Company. Previously, her shares were classified as friendly shares to her younger brother, Chairman Cho Hyun-beom, but her stance has changed following her support for the tender offer.

Combining the stakes of the eldest daughter Cho (0.81%), eldest son and advisor Cho Hyun-sik (18.93%), and younger sister Cho Hee-won (10.61%), the three siblings hold a total of 30.35%. In addition, MBK plans to secure 20.35% to 27.32% of shares through the tender offer. If the tender offer succeeds, the three siblings and MBK will collectively hold more than 50% of the shares.

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To ensure the success of the tender offer, MBK raised the offer price from 20,000 won to 24,000 won on the 15th. This price is 51.4% higher than the closing price of 15,850 won on the same day. MBK's aggressive pricing is interpreted as a strategic move to attract shareholder participation and secure management control.

Until now, the prevailing view in the industry was that the tender offer was unlikely to succeed. Hankook & Company also maintained that defending management control was not an issue. Chairman Cho already holds a 42.03% stake, so acquiring just over 8% more would secure a majority stake of 50%. On the 14th, Chairman Cho visited the Seoul Central District Court to attend a trial related to allegations of unfair support and embezzlement/misappropriation involving affiliates, and expressed confidence to reporters, saying, "Preparation to defend management control is complete. We have sufficient financial resources."

Additionally, allies of Chairman Cho, such as hy (Korea Yakult), hold shares in the 1% range, and combined with Honorary Chairman Cho's 2.72% stake and available cash resources, it was calculated that management control could be maintained without difficulty. Excluding Chairwoman Cho's 0.81% stake, Chairman Cho's side holds 44.8% of shares.

However, with Chairwoman Cho's recent statement and MBK's increased tender offer price, the management dispute has entered a new phase. Various variables remain, including the success of the tender offer depending on stock price movements and investigations by the Financial Supervisory Service, suggesting the dispute will be prolonged.

Following the management dispute, Hankook & Company's stock price, which had risen to the 23,000 won range, fell to the 15,000 won range on the 15th. After Chairman Cho's remarks, the market believed the dispute had been settled for the time being. However, after market close, MBK announced an increase in the tender offer price, making the stock price movement on the 18th, when the market reopens, a key factor.

Furthermore, MBK has requested the Financial Supervisory Service to investigate whether there were any issues in hy's acquisition of Hankook & Company shares, as hy is considered an ally of Chairman Cho. MBK is reportedly arguing that if a company purchases shares to secure friendly shares of the existing largest shareholder after a tender offer declaration, it could constitute a breach of the duty of care.

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