MBK Partners Increases Tender Offer Price by Korea & Company to "24,000 KRW per Share"

MBK Partners, the largest private equity firm (PE) in South Korea, has decided to raise the tender offer price to acquire the management rights of Korea & Company. Accordingly, the tender offer target price has been increased from the initial 20,000 KRW per share to 24,000 KRW per share, reflecting a 20% premium.

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On the 15th, MBK Partners stated, "MBK Partners Special Situations (MBKPSS) has submitted a revised report regarding the increase in the tender offer price." Regarding the reason for the revision, they said, "We are raising the tender offer price for the first and last time to protect the shareholder value of Korea & Company's general and minority shareholders and to provide them with an opportunity to recover their investments and realize profits." The increased tender offer price is 51.4% higher than the closing price of 15,850 KRW on the same day.

Previously, on the 5th, MBK Partners teamed up with Cho Hyun-sik, advisor and eldest son of Cho Yang-rae, honorary chairman of Korea & Company Group (formerly Korea Tire Group), and Cho Hee-won, the second daughter, to launch a tender offer for shares. The Cho advisor’s side plans to increase their stake up to 46.25%, surpassing the current largest shareholder, Chairman Cho Hyun-beom’s stake of 42.03%.

Subsequently, the stock price even exceeded MBK Partners’ target price of 20,000 KRW. However, as Honorary Chairman Cho reportedly informed those around him that he would respond directly if the tender offer price was raised further, showing support for Chairman Cho, there were forecasts that Chairman Cho had gained the upper hand. In fact, on the 7th, Honorary Chairman Cho purchased 57 billion KRW worth of Korea & Company shares through on-market purchases, increasing the combined stake of Chairman Cho and related parties from 42.89% to 45.61%.

This increase in the tender offer price is interpreted as a decisive move by MBK Partners to gain control. A representative of MBK Partners said, "It is difficult for Korea & Company’s corporate value to be realized under the current governance structure, and shareholder and corporate value have been continuously declining. We launched the tender offer to transform and grow the company into a better one. This is the last chance to improve corporate governance."

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