Hankook Tire family feud escalates as brothers wrestle for control

Industry

Published: 06 Dec. 2023, 10:57 Updated: 06 Dec. 2023, 18:54

Hankook Tire family feud escalates as brothers wrestle for control

From left, Cho Hyum-bum and Cho Hyun-sik [JOONGANG PHOTO]

Another family feud looms over Hankook & Company, the company behind the country's largest tire manufacturer, as the elder brother attempts to retake management control over its younger brother, the current chairman.

MBK Partners, Asia's largest private equity firm, said Tuesday it has launched a public tender for Hankook & Company, the holding company of Hankook Tire & Technology, offering 20,000 won ($15.20) per share with a goal of purchasing up to 25.93 million shares, or 27.32 percent of the company's total issued shares.

MBK Partners has signed an agreement with Cho Hyun-sik, adviser to Hankook & Company, for the tender. The offer will be carried out through Ventura Corporation, a special purpose company established under the MBK Partners Special Situations fund.

The tender price is around 19 percent higher than the Kospi-listed share’s closing price on the day of the announcement.

The purchase comes as the current largest shareholder "is involved with various bribery and embezzlement cases," and if the tender offer is successful, MBK Partners will immediately proceed "corporate governance restructuring and management enhancement plans to revamp the shareholder value of Hankook & Company,” it said in a statement.

Hankook Tire and Technology Chairman Cho Hyun-bum enters the Seoul Central District Court for interrogation on his alleged crimes. [YONHAP]

If successful, the older Cho's stake in the firm will soar to 46.25 percent, elevating him to the status of its largest shareholder. This will surpass the 42.03 percent stake held by Cho Hyun-bum, the younger brother and the chairman of the company.

It is the second sibling feud in Cho's family after the tire giant was embroiled in a family dispute in 2020 after the patriarch of the owner's family, Cho Yang-rai, handed his entire stake to the younger Cho.

Their sister Cho Hee-kyung, the eldest daughter of Cho Yang-rai, holds an 0.81 percent stake while her younger sister Cho Hee-won owns 10.61 percent.

It was reported Tuesday that Chairman Cho Hyun-bum does not plan to launch a separate tender offer bid to secure an additional stake in the company.

After the announcement, Hankook & Company's shares surged to a daily upper limit of 29.9 percent on Tuesday to 21,850 won, even surpassing the tender offer price.

It closed at 20,750 won Wednesday, down 5 percent from the previous day.

Shareholders of Hankook & Company can subscribe to the tender offer through Korea Investment & Securities, the acting brokerage firm, by Dec. 22.

The settlement date is Dec. 27.

BY SARAH CHEA [chea.sarah@joongang.co.kr]