‘Activist’ Cha Partners: “Namyang Dairy Products, Conduct a Public Tender Offer at 820,000 KRW per Share”

Activist fund Cha Partners Asset Management announced on the 27th that it will make shareholder proposals to Namyang Dairy Products and launch a public campaign.

The main shareholder proposals include ▲share repurchase ▲appointment of an auditor ▲5-for-1 stock split ▲cash dividends. Cha Partners proposed that these agenda items be listed for the regular shareholders' meeting in March.

Regarding the share repurchase, they proposed acquiring 50% of the common and preferred shareholders' general shares at 820,000 KRW per share as treasury stock. The expected total acquisition amount reaches 191.6 billion KRW. Kim Hyung-gyun, head of Cha Partners, said, “This is to restore the rights of general shareholders who were sidelined during the controlling shareholder's merger and acquisition (M&A) process,” adding, “Considering the need to provide shareholders who trust the new management with an opportunity to continue investing and the scale of the company's cash and other non-core assets, we set the acquisition at 50%, not 100%.”

For the new auditor, they proposed the appointment of attorney Shim Hye-seop. This is based on the judgment that an independent auditor candidate is necessary to overcome the crisis threatening the company's value. They also proposed a 5-for-1 stock split through an amendment to the articles of incorporation to prevent the delisting of preferred shares and increase the number of tradable shares for stock value revaluation. Additionally, they proposed dividends at the market average level of 20,000 KRW per common share and 20,050 KRW per preferred share.

Cha Partners stated that regardless of the lawsuit outcome, they will strive to enhance shareholder value at Namyang Dairy Products. Currently, a stock transfer lawsuit between private equity fund Hahn & Company and Chairman Hong Won-sik is ongoing. Having won both the first and second trials, general shareholders are increasingly weighing the possibility that Hahn & Company will become the controlling shareholder of Namyang Dairy Products. Kim Hyung-gyun said, “As the dispute between Chairman Hong Won-sik and Hahn & Company has prolonged for nearly two years, it is necessary to recover the damages suffered by Namyang Dairy Products’ general shareholders,” and added, “Grand cooperation from both Chairman Hong Won-sik and Hahn & Company is needed to pass the shareholder proposal agenda.”

Finally, Kim said, “This will not be limited to the shareholder proposals at this regular shareholders' meeting; as a long-term investor, we plan to continue playing a monitoring and checking role as a shareholder to promote the sustainable development and enhancement of shareholder value at Namyang Dairy Products.”