VIG Partners, a private equity fund manager, announced on the 23rd that the tender offer for the purpose of delisting ViOL, which began on the 18th, is proceeding smoothly.
According to VIG Partners, during the three days from the tender offer announcement until last Friday, there was a large-scale trading volume of 27.47 million shares, which is 73.4% of the total shares subject to the tender offer. In particular, institutions and foreign investors were the main buyers of these large volumes. During this period, the share price remained slightly below the tender offer price of 12,500 won.
In the domestic capital market, the success of a tender offer is typically measured by three factors: the share price remaining slightly below the tender offer price after the offer begins, individual investors selling while institutional and foreign investors buy, and a surge in trading volume at the beginning of the tender offer period.
On June 20, according to the Korea Exchange, ViOL's closing price was 12,380 won per share, which is 1.0% lower than the tender offer price. The price of 12,380 won represents the historical high since ViOL's listing up until the tender offer announcement on the 18th, allowing all existing shareholders to realize profits through on-market sales.
Over the three-day period, individual shareholders sold approximately 19.64 million shares on the market, showing a significant selling trend. Most of these shares were purchased by institutional and foreign investors, displaying a typical pattern of tender offer arbitrage. In this arbitrage, institutional and foreign investors, aiming for a margin of around 1%, buy shares sold by individuals on the market and then participate in the tender offer to realize their profits.
The company explained that, as it is common for trading volume to decrease after peaking on the first day of a tender offer, a higher trading volume in the first three days suggests that tender offer arbitrage was highly concentrated, which increases the likelihood of a successful tender offer.
During the first three days following the announcement of ViOL's tender offer, the total trading volume reached approximately 27.47 million shares, which is about 73.4% of the 37.44 million shares subject to the tender offer, and about 47.0% in terms of equity ratio. The ratio of three-day trading volume to the number of shares subject to the tender offer is higher than that of Lutronic, Jcismedical, and Businesson, which are recent cases where private equity funds successfully completed delistings. This is interpreted as a positive signal for the success of ViOL's tender offer for delisting.
It is also known that VIG Partners is considering a comprehensive share exchange procedure with cash settlement, similar to the cases of Lutronic, Jcismedical, and Businesson, as part of its delisting plan following the tender offer. If this procedure is carried out, minority shareholders of ViOL will sell their shares to VIG Partners' investment purpose company and receive cash, in accordance with procedures under the Commercial Act.
In past cases, the cash settlement per share was similar to the tender offer price. However, since it takes more than two months from the end of the tender offer to the completion of the share exchange, individual shareholders may incur opportunity costs on their investment in ViOL shares during this period.
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