AK Holdings Continues Negotiations with Taekwang Industrial
Board Expected to Re-Vote if Conditional Agreement is Reached
The sale of Aekyung Industrial by Aekyung Group is experiencing last-minute complications. AK Holdings, the holding company of Aekyung Group, selected Taekwang Group as the preferred bidder and pushed forward with the sale of Aekyung Industrial. However, it is reported that the sale price, which fell short of expectations, has become a stumbling block just before the final contract.
On October 15, AK Holdings is scheduled to hold a board meeting in the afternoon to make a final decision on whether to sell Aekyung Industrial. Previously, AK Holdings also held a board meeting the previous day to discuss the agenda of selling Aekyung Industrial to Taekwang Industrial, but the meeting ended without a clear conclusion. Effectively, this amounts to a 'conditional disapproval,' meaning the deal would only be approved if certain conditions are met.
According to the memorandum of understanding (MOU) signed last month between AK Holdings, the holding company of Aekyung Group, and Taekwang Industrial regarding the stock purchase agreement, both companies were to approve the sale and acquisition at their respective board meetings and sign the final contract on October 15. Taekwang Industrial completed its board resolution the previous day in favor of signing the final contract with Aekyung Industrial. Taekwang Industrial is expected to make a public announcement regarding the acquisition of Aekyung Industrial in accordance with AK Holdings' final decision.
Regarding this, an official from AK Holdings explained, "While a broad agreement has been reached, we are still in discussions with Taekwang Industrial over the detailed terms," adding, "A public announcement on the matter is expected this afternoon." If the two parties reach an agreement on the points of contention raised at the board meeting, it is expected that the agenda for the sale of Aekyung Industrial will be approved at the board meeting to be held later in the day.
Previously, AK Holdings selected Taekwang Industrial, T2 Private Equity, and Yuanta Investment Consortium as preferred bidders and signed an MOU last month to sell its 63.38% stake in Aekyung Industrial held by Aekyung Asset Management. In order to improve the group’s financial structure, Aekyung Industrial, which serves as the group’s cash cow and holds high asset value, was put up for sale to secure liquidity.
Some observers are focusing on the possibility that price conditions influenced the conditional disapproval by the AK Holdings board. The market had estimated the sale price at around 600 billion won, taking into account the management premium, but the actual amount set for Taekwang Industrial’s acquisition was in the 400 billion won range, which reportedly led to internal disagreements.
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