MBK "Korea & Company Tender Offer Falls Short of Target... Will Monitor Corporate Governance Improvement" (Comprehensive)

MBK Partners attempted to acquire more than 20.35% of the shares of Hankook & Company, the holding company of the Hankook Tire Group, through a tender offer but failed.

On the 22nd, MBK Partners stated, "Meaningful subscriptions were received, but the target was not reached," adding, "Improving the corporate governance of Hankook & Company is of utmost importance, and we will continue to monitor the situation."

The results of the tender offer subscription for Hankook & Company shares conducted by MBK until that day showed that the minimum purchase volume (20.35%) was not met. Previously, MBK had decided not to purchase any shares if the minimum volume was not reached in the tender offer.

Hankook & Company’s stock price closed at 16,380 KRW, down 4.27% that day.

Initially, the financial investment industry did not expect a high possibility of success for the tender offer. Typically, when a tender offer begins, the stock price forms at a low price close to the tender offer price, but this time, since the tender offer started on the 5th, the stock price exceeded the tender offer price.

MBK Partners adopted a strategy to raise the tender offer price from 20,000 KRW to 24,000 KRW within ten days of the tender offer’s start, but the appearance of Cho Yang-rae, Honorary Chairman of Hankook & Company Group, and the "white knight" Hyosung Advanced Materials made the possibility of success low.

As it became known that Cho Hyun-beom, the second son and chairman defending the tender offer of Hankook & Company, and his allied shares approached 50%, the momentum of the management rights dispute tilted to one side, and the stock price fluctuated around the 17,000 KRW range, far below the tender offer price of 24,000 KRW.

The friendly forces’ shares, including Chairman Cho Hyun-beom (42.03%), Honorary Chairman Cho Yang-rae (4.41%), and Hyosung Advanced Materials (0.75%), reached 47.19%.

The "anti-Cho Hyun-beom coalition," including Cho Hyun-sik (18.93%), Cho Hee-won (10.61%), and Cho Hee-kyung (0.81%), holds about 30.38% of the shares.

Although this tender offer ended in failure, there remains a possibility that hostile takeover attempts may resurface depending on the results of the financial authorities’ investigation.

On the 15th, MBK Partners requested an investigation by the Financial Supervisory Service, suspecting market manipulation and violations of large shareholder reporting obligations related to the share acquisition by Honorary Chairman Cho Yang-rae.

MBK Partners claimed that Chairman Cho violated the Capital Markets Act by acquiring shares at a high price and belatedly disclosing the fact of securing his stake.

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