Emart, Shinsegae Construction Announces Tender Offer at 18,300 KRW per Share (Comprehensive)

Shinsegae Construction Initiates Voluntary Delisting
Emart Publicly Offers to Buy 27% Stake in Shinsegae Construction
Successful Bid to Fully Incorporate as Subsidiary... Accelerating Business Structure Reorganization

Emart will conduct a tender offer for Shinsegae Construction shares. If this tender offer succeeds, Shinsegae Construction is expected to be voluntarily delisted and incorporated as a wholly owned subsidiary of Emart, accelerating the business structure reorganization.

Emart announced on the 30th that it held a board meeting on the 27th and approved the tender offer for its subsidiary Shinsegae Construction shares.

Shinsegae Construction logo.

The tender offer period is 30 days from September 30 to October 29. The tender offer price is 18,300 KRW per share, which is about 19% higher than Shinsegae Construction's closing price of 15,370 KRW per share on September 26, the day before the board resolution. Compared to the recent one-month stock price, it is 29% higher, and compared to the past year, it is 30% higher.

The shares subject to this tender offer amount to 2,120,661 shares, which is 27.33% of the total shares, excluding treasury shares (171,432 shares, 2.21%) and Emart's holdings (5,468,461 shares, 70.46%) of Shinsegae Construction's total shares.

Currently holding 70.5% of Shinsegae Construction shares, Emart plans to secure more than 95% ownership through this tender offer. For a listed company on the Korea Exchange to voluntarily delist, the major shareholder must secure more than 95% of shares excluding treasury shares. It is estimated that Emart will need about 38.8 billion KRW to acquire 100% ownership.

Emart explained that the reason for pursuing voluntary delisting through the tender offer of Shinsegae Construction shares is to strengthen responsible management by the major shareholder. Shinsegae Construction has secured liquidity exceeding 1 trillion KRW this year to enhance financial soundness. Based on this, it plans to begin full-scale restructuring, including the disposal of unprofitable business sites.

To this end, Emart expects that by acquiring 100% of Shinsegae Construction shares, it can establish an efficient management decision-making system and accelerate the restructuring of the construction business structure and the formulation of mid- to long-term business portfolio strategies.

Emart's push for Shinsegae Construction's voluntary delisting also considers the interests of minority shareholders. During the business adjustment process, such as disposing of unprofitable sites, additional losses may occur due to subrogation and debt guarantee fulfillment, which could act as a short-term factor for stock price decline.

If Emart succeeds in securing more than 95% of Shinsegae Construction shares through the tender offer, it plans to convene a general shareholders' meeting of Shinsegae Construction in November to resolve the voluntary delisting agenda.