MBK's unlikely Hankook Tire takeover bid nears finish line

Industry

Published: 22 Dec. 2023, 18:48

MBK's unlikely Hankook Tire takeover bid nears finish line

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

Asia’s largest private equity firm, MBK Partners, called for the corporate structure reform for Hankook & Company, which the firm has been seeking to secure a controlling stake in.

MBK’s statement came in on Friday as its public tender offer to take over Hankook & Company — the parent of Korea’s top tire manufacturer Hankook Tire & Technology — neared the deadline, while the market is largely expecting MBK’s attempt to fall through.

“Despite having a strong fundamental and potential for further growth, the corporate valuation of Hankook & Company has been declining due to its poor governance structure and the judicial risks from the largest investor,” said MBK Partners’ MBKP Special Situation (MBKP SS), an entity spearheading its public tender offer.

Hankook & Company has been embroiled in a sibling feud between its current chairman and his siblings — who teamed up with MBK Partners — over the control of the holding company, as the private equity firm on Dec. 5 launched a public tender offer to acquire a minimum of 20.35 percent and a maximum of 27.32 percent of the company.

The firm stressed that its public tender offer aims to " improve the corporate governance structure.”

Investors have been betting against MBK Partners, which is aligned with Cho Hyun-sik, the eldest son of the owner’s family and adviser to Hankook & Company, and his two sisters, who are attempting to retake management control over their younger brother Cho Hyum-bum, the current chairman.

MBK and the older Chos butted heads with the chairman as well as Cho Yang-rai, their father and Hankook & Company Honorary Chairman, who weighed in on the issue in support of his youngest son.

The patriarch and his allies have acquired additional company shares to secure the controlling stake and have secured more than 47 percent of shares in total as of Friday.

The public tender offer will be closed on Monday, but Friday was the last trading day before the official deadline. The result will be issued on Wednesday.

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