SEOUL, Dec. 11 (Korea Bizwire) — Private equity firm MBK Partners has ruled out the possibility of raising the price of its public tender offer for Hankook & Company Co., the holding company of South Korea’s top tiremaker, a source close to the matter said Monday.
Last week, a special purpose company set up by MBK Partners offered to buy up to a 27.32 percent stake in Hankook & Company for 20,000 won (US$15.20) per share, with the deadline for the offer set at Dec. 24.
Since then, shares of Hankook & Company have surged and closed at 22,150 won last Friday, sparking speculation that MBK Partners may increase the offering price.
MBK Partners is expected to spend at least 520 billion won for the tender offer, according to market watchers.
The source, who spoke on the condition of anonymity, told Yonhap News Agency that MBK Partners is barred from spending more than 560 billion won for the bid due to rules on an investment limit, reaffirming that the equity firm would not increase the bid price.
Hankook & Company is the holding company of Hankook Tire & Technology Co., the world’s seventh-largest tiremaker by sales.
The tender offer for Hankook & Company rekindled a family feud for the tiremaker.
Before announcing the tender offer, Cho Hyun-sik, an advisor of Hankook & Company and an elder brother of the company’s Chairman Cho Hyun-bum, and his elder sister, Hee-won, signed a contract with the special purpose company for the tender offer.
Currently, Hyun-sik holds 18.93 percent of the holding firm’s stake and Hee-won owns a 10.61 percent stake.
If the takeover bid is successful, the special purpose company, Hyun-sik and Hee-won would control up to 57 percent stake in Hankook & Company.
The three Chos are children of Cho Yang-rai, the late former chairman of the tiremaker.