'Native Pizza' MP Group Changes Owner, Acquired by Private Equity Fund... Chairman Jung Woo-hyun Becomes Second Largest Shareholder

Jung Woo-hyun, Former Chairman of MP Group

[Asia Economy Reporter Lee Seon-ae] The owner of MP Group, which operates the domestic native pizza franchise brand 'Mr. Pizza,' is changing to a domestic private equity fund.

According to the electronic disclosure system and industry sources on the 23rd, MP Group announced the day before that it had selected TR Investment as the preferred bidder for the sale. TR Investment will have exclusive priority negotiation rights for the contract for the next month and will decide whether to finalize the sales contract after due diligence over the next two weeks.

TR Investment will acquire 41.3% of MP Group's shares for a total of 35 billion KRW. First, 10 million shares (12.37%) held by former MP Group Chairman Jung Woo-hyun and related parties will be transferred to TR Investment for 15 billion KRW. Additionally, 40 million new shares will be issued through a paid-in capital increase for 20 billion KRW.

Once the capital increase is completed, TR Investment will become the largest shareholder with a 41.3% stake. The shareholding of former Chairman Jung and related parties will decrease from 48.92% to 24.4%, remaining as the second-largest shareholder.

MP Group initially planned to transfer all 48.92% of shares held by former Chairman Jung and others but shifted direction to sell some existing shares to reduce the buyer's burden and allow them to remain as the second-largest shareholder. Maintaining the listing through the sales contract and capital increase could lift the trading suspension, making it possible to sell shares on the market later.

Meanwhile, Mr. Pizza opened its first store in front of Ewha Womans University in 1990. It established itself as the number one pizza brand in Korea and gained popularity in the 2000s. However, performance sharply deteriorated due to controversies over power abuse, the arrest of former Chairman Jung on charges of breach of trust and embezzlement, and a slowdown in the pizza franchise market. Operating losses of 1.7 billion KRW in 2017, 377 million KRW in 2018, and 2.46 billion KRW in 2019 were recorded.

Due to the arrest of former Chairman Jung, a reason for delisting review arose, and stock trading has been suspended for three years. Although a two-year improvement period was granted while relinquishing management rights and restructuring the headquarters, the grace period expired this year, putting the company at risk of delisting. Ultimately, it was put up for sale after 30 years since its founding.