VIG Secures 85% Stake in Viol Through Tender Offer... Delisting Expected

VIG Partners, a domestic private equity fund manager, announced on July 9 that it had successfully completed its tender offer for Viol, which was conducted from June 18 to July 7.

According to the tender offer result report for Viol disclosed on the Financial Supervisory Service’s electronic disclosure system on the same day, VIG acquired 28,488,315 common shares of Viol through the tender offer. When combined with the shares to be acquired from the largest shareholder, DMS, this amounts to approximately 85% of the voting shares.

Previously, companies such as Lutronic, LocknLock, Connectwave, Jcismedical, and Koentec each secured approximately 80% to the mid-80% range of voting shares through a single tender offer. They then completed delisting by conducting comprehensive share exchanges, following additional procedures such as on-market purchases or additional tender offers to protect minority shareholder rights.

Therefore, since VIG has secured approximately 85% of the shares through the tender offer, it is expected to proceed with delisting by utilizing mechanisms such as a comprehensive share exchange. Previously, in its tender offer announcement, VIG had stated that if it acquired a sufficient level of shareholding, it would promptly take steps to delist the company in accordance with relevant laws and regulations.

A comprehensive share exchange is a method in which the largest shareholder, holding at least 67% of the voting shares, passes a special resolution at a general shareholders’ meeting to exchange the shares of minority shareholders for shares of the company that will become the wholly owning parent. A cash settlement type share exchange, in which cash is provided instead of shares in the parent company, is also possible. Through this tender offer, VIG has already secured approximately 85% of the voting shares, so once the transaction with DMS is completed, a comprehensive share exchange can be carried out without the need for additional share purchases.

However, before proceeding with a comprehensive share exchange, VIG plans to guarantee minority shareholders an opportunity to sell their shares by purchasing all remaining shares on the market at the same price as the tender offer.

An investment banking industry official explained, "The usual reason the largest shareholder conducts on-market purchases before a comprehensive share exchange is not primarily to secure additional shares, but rather to provide an exit opportunity to minority shareholders who did not participate in the tender offer, and to minimize the opportunity cost for minority shareholders until the comprehensive share exchange is completed."

Meanwhile, the on-market purchases are expected to continue until the date the transaction with DMS is finalized, or until all remaining shares are purchased before that date.