MBK raises bid to acquire Hankook Tire as family feud heats up

Industry

Published: 17 Dec. 2023, 17:27

MBK raises bid to acquire Hankook Tire as family feud heats up

Hankook & Company headquarters in Pangyo, Gyeonggi [HANKOOK & COMPANY]

MBK Partners, Asia’s largest private equity firm, hiked its offering price to acquire a controlling stake in Hankook & Company, the parent of Korea’s leading tire manufacturer, as the sibling feud over the control of the holdings company heats up even more.

The private equity firm is aligned with Cho Hyun-sik, the eldest son of the owner’s family and adviser to Hankook & Company, and Cho Hee-won, his sister, who are attempting to retake management control over their younger brother Cho Hyum-bum, the current chairman.

The latest move from MBK Partners came after Cho Yang-rai, honorary chairman and the patriarch of the family, weighed in on the dispute, siding with his younger son.

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

Hankook & Company is the holdings company of Hankook Tire & Technology.

On Sunday, MBK Partners raised the offering price in its public tender to acquire a minimum of 20.35 percent and a maximum of 27.32 percent of Hankook & Company by 20 percent.

The revised offering price now stands at 24,000 won ($18.40) per share, up from the initial offer of 20,000 won. It is 51.4 percent higher than the Kospi-listed company’s closing price of 15,850 won on Friday.

In a statement issued that day, MBK Partners said it has “increased the offering price for the first and last time to protect the shareholder value for retail and small shareholders and provide them with an opportunity to realize their gains.”

Before MBK’s announcement, Hankook & Company Honorary Chairman Cho Yang-rai had acquired 2.72 percent of the company shares since Dec. 7, two days after the public tender was launched, to secure the ownership held by his youngest son.

With the additional stake from his father, the company stake owned by the younger Cho and his allies increased from 42.03 percent to 45.61 percent.

The patriarch’s intervention in the dispute caused Hankook & Company’s share price to plunge by 25 percent on Friday, as shareholders bet on the younger brother’s win. However, the tension escalated once again as MBK Partners increased its offering price after the market closure.

MBK Partners requested an investigation by the financial authorities on the honorary chairman’s 2.72-percent purchase, alleging price manipulation.

If MBK Partners’ tender offer goes through successfully, the older Cho and his allies’ stake in the company will soar from 29.54 percent to 56.86 percent.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]