ALL NOVEL 57
“How much is the premium?”
Dokyung and Ryu Tae-hwa had moved to Dokyung’s room to begin assessing the situation. Sitting at his desk and gathering information, Dokyung looked at Ryu Tae-hwa.
“They announced they would buy all shares at 45,400 won, a 40% premium over the stock price of 32,400 won at the time of the announcement.”
Voluntary delisting literally meant that the major shareholder was voluntarily withdrawing from the listing.
It was completely different from cases where a company is forcibly delisted for failing to meet listing maintenance conditions.
“The premium is as high as 40%?”
“It seems they believe the price will rise even higher if they don’t meet the voluntary delisting requirements this time.”
Voluntary delisting could only be done if the major shareholder reclaimed 95% of the shares traded in the market.
In other words, setting a 40% premium indicated a firm determination to delist no matter what.
“Then doesn’t this mean there’s some good news?”
Dokyung nodded at Ryu Tae-hwa’s question.
It meant that Gaon Medical’s major shareholder, in other words, the owner of Gaon Medical, believed the stock price would rise even higher than the premium price of 45,400 won.
If they thought the stock price would remain lower than that, there would have been no need to buy at a 40% premium; they could have just continued buying in the market.
“In 2014, Taeseong Chemical attempted to voluntarily delist its affiliate, Taeseong Gas.”
Ryu Tae-hwa began to concentrate quietly at Dokyung’s words.
“At that time, they said they would buy shares trading around 30,000 won with a 20% premium.”
“But as far as I know, Taeseong Gas only voluntarily delisted in 2020…”
“That’s because they failed at that time. The reason they tried to delist Gas was to consolidate affiliates centered around Gas.”
“Then it must have been good news for Taeseong Gas shareholders.”
“That’s right. As a result, the rumor spread, and shareholders refused to sell even at the 20% premium.”
“So…”
“Yes, they failed to secure 95% of the shares in the market, which was the requirement for voluntary delisting. Naturally, the stock traded at a price higher than the premium price Taeseong Chemical had offered.”
Of course, if a successful company initiates voluntary delisting procedures, everyone would think there must be good news.
Naturally, investors drive the stock price even higher than the premium price.
“And as you mentioned, in 2020, Taeseong Gas announced voluntary delisting again, and the premium price was…”
“Doubled, right?”
Taeseong Gas announced they would buy shares at 84,000 won each, which had been trading at 42,000 won, and achieved the voluntary delisting requirements.
“Shouldn’t we view the current situation the same way?”
“But back then, there was a reason. Taeseong Chemical was trying to line up gas-related businesses under Taeseong Gas.”
Companies listed on the stock market had the advantage of easily securing business funds, but they couldn’t conduct business as they pleased.
Especially in cases of affiliate consolidation, there was strong opposition from shareholders, so voluntary delisting was done to carry out such actions.
“However, in Gaon Medical’s case, there’s no reason. They’re doing well in business and have no affiliates. The major shareholder doesn’t seem to be trying to expand the business either.”
It was like a game of chicken. A game of figuring out whether the good news was better than the premium price offered by the major shareholder.
“The timing of investment recovery is important, so we need to figure that out.”
“Yes, it’s a game of chicken.”
Dokyung pondered for a moment and then looked at Ryu Tae-hwa.
“We need information.”
“Do you have any predictions?”
“…In the current situation, the only thing we can consider is an acquisition.”
“If it goes as predicted?”
“We’ll sell at the premium price. An acquisition can’t happen if only one side wants it.”
“I’ll try to find the information.”
Saying this, Ryu Tae-hwa took out his mobile phone and left Dokyung’s office, while Dokyung continued to search for reports on Gaon Medical from various securities firms.
[Gaon Medical +6%]
Gaon Medical, which had been showing steady movement, was also rising due to the voluntary delisting announcement.
Of course, there wasn’t a big increase yet, as if people were just dipping their toes in to watch.
“There were no companies expressing interest in acquisition…”
Just as he was deep in thought, the door opened and Ryu Tae-hwa entered.
“Branch Manager.”
“There’s a rumor that Gyeongseong Group has been in contact with PEFs recently.”
“You mean private equity funds?”
“Yes. It’s said that private equity funds are attracting about 2 trillion won in investment, and the rumor is that the purpose is to acquire domestic biotech companies.”
At Ryu Tae-hwa’s words, Dokyung snapped his fingers and turned to the computer.
He then looked at Gyeongseong Group’s stock price. The price wasn’t rising, but there was accumulation coming from somewhere.
“Foreign capital is flowing in. It seems they’re sharing the same rumor.”
“Then, Dokyung-ssi’s judgment is…”
“If it’s Gyeongseong Group, that changes things. I’ll watch a bit more. And I’ll catch the exit timing.”
Dokyung smiled as he spoke to Ryu Tae-hwa, and Ryu Tae-hwa nodded as if he felt some trust in Dokyung’s smile.
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“The total return rate is 77.6%, and the profit is about 31 billion won.”
Two months later, Dokyung handed over documents containing the return rate of the client Ryu Tae-hwa had entrusted to him, and Ryu Tae-hwa’s face bore a smile rarely seen.
Two months ago, after the news of Gaon Medical’s voluntary delisting came out, articles matching the information Ryu Tae-hwa had obtained began to appear.
“[Exclusive] Gyeongseong Group Eyes Biotech as Future Food?”
“[Exclusive] Gyeongseong Group Meets with Private Equity Fund Representatives in Hong Kong and Singapore. Official: ‘Meeting to Raise Funds for Domestic Company Acquisition’.”
“Is Gaon Medical the Domestic Biotech Company Gyeongseong Group Has Targeted?”
“Sale Rumors Swirl as Gaon Medical Announces Voluntary Delisting…”
The timely moves of Gyeongseong Group and Gaon Medical caught everyone’s attention, and eventually, the acquisition rumors were confirmed as true.
Gyeongseong Group formed a consortium with a private equity fund in Singapore and openly expressed their intention to acquire Gaon Medical, sending a letter of intent to Gaon Medical with voluntary delisting as a precondition.
“Gyeongseong Group: ‘Investing 6 Trillion Won to Enter Medical Device and Beauty Business’.”
“Gyeongseong Group: ‘We Value Gaon Medical at 6 Trillion Won’.”
Once their position was exposed, Gyeongseong Group opened up about everything. And the stock prices of both Gyeongseong Group and Gaon Medical began to rise together.
“The client’s request was only to recover the principal.”
“I know. But when an opportunity arises, it’s the job of a PB managing assets to grow them as much as possible.”
“I wasn’t trying to blame you. I just wanted to praise Yoon Dokyung-ssi for achieving results beyond what was requested.”
If it had been negotiations for sale with a foreign company instead of Gyeongseong Group, Dokyung would have certainly sold at the 40% premium price.
However, the company entering the acquisition race was Gyeongseong Group, a domestic conglomerate, and Dokyung thought it was worth waiting longer.
“Gyeongseong Group’s Gaon Medical Acquisition Speeds Up.”
“Gyeongseong Group and Gaon Medical Major Shareholders Sign Acquisition MOU.”
“Gaon Medical: ‘8,160,640 Shares (24.3%) Purchased in This Public Offering. Shareholding Ratio 81%’.”
“Gaon Medical: ‘81% of Shares in Market Purchased So Far. Will Meet Requirements and Delist’.”
Gaon Medical continuously disclosed how far the public offering had progressed. It was a threatening sign to market participants.
‘We’ll delist as soon as we meet the 95% requirement, so cooperate with the public stock offering.’
Market participants naturally had to be intimidated by such threats.
Once delisted, they wouldn’t be able to sell their shares when they wanted to.
“Did you predict they wouldn’t meet the delisting requirements?”
“I predicted to some extent. Gaon Medical was moving too hastily.”
Gaon’s major shareholder saw it as a once-in-a-lifetime opportunity and wanted to sell the company, so naturally, they had to accept the acquirer’s proposal for delisting.
Gyeongseong Group wanted to monopolize Gaon Medical’s business profits after the acquisition.
Since their sales outlook was bright, monopolizing things like dividend income would make it easier to recover the investment.
However, despite various strategies, Gaon Medical failed to meet the delisting requirements.
“Since we took our position quite early, I wanted to watch all situations leisurely.”
“Leisurely…”
“Yes. I thought that even if they succeeded in meeting the delisting requirements, Gyeongseong Group would buy all the shares to monopolize the profits.”
Dokyung didn’t think they would immediately delist as soon as they met the 95% requirement as they had threatened.
They would have eventually gathered all the shares in the market.
After all, there’s a difference between a major shareholder owning 100% of a company and owning 95%.
Something that’s entirely yours is different from something where others have a 5% stake.
“The 40% premium that Gaon Medical added is a high price, but Gaon Medical can get an even higher price from Gyeongseong Group, so they set that price.”
“That’s right. The acquisition amount Gyeongseong Group disclosed was enormous.”
“What if the public offering fails?”
At Dokyung’s question, Ryu Tae-hwa smiled and nodded.
“The stock price would match the price Gyeongseong Group proposed.”
In fact, when Gaon Medical announced the failure to meet the voluntary delisting requirements in the first public offering, the stock price rose crazily.
It was a surge created by the law of supply and demand – few people wanting to sell because there were few shares in the market, but many wanting to buy.
It traded at a price 70% higher than the day Dokyung bought the stock, and as the promised time approached, he sold at that price.
“If we had more time, the stock price would have risen even more.”
Gyeongseong Group entered into negotiations with Gaon Medical despite their request not being met, and the acquisition negotiations were about to be concluded.
“Is it because Gyeongseong Group said they would voluntarily delist again after the acquisition?”
“Yes. Gyeongseong Group needs to delist to monopolize the profits from Gaon Medical.”
“It’s a shame, but the period was limited. You really worked hard.”
“Not at all. Rather, it was a good opportunity to confirm that you trust me enough to entrust such a large sum.”
Saying this, Dokyung handed over another prepared file folder.
“This is the account of the client you entrusted to me. As I mentioned, the total return rate is 77.6%, and the profit is about 31 billion won. All positions have been liquidated, and the current deposit is 71.847 billion won.”
After checking the file folder Dokyung handed over, Ryu Tae-hwa nodded, stood up, and approached Dokyung.
Then he extended his hand.
“I always say this, but this time, you really worked hard.”
Dokyung grasped Ryu Tae-hwa’s outstretched hand and bowed his head.
“Thank you.”
“I’ll report to headquarters to ensure appropriate compensation is given.”
Dokyung bowed his head once more at Ryu Tae-hwa’s words.
“Well, I need to report to the client too, so let’s talk again later.”
“Yes. I’ll take my leave.”
Dokyung greeted him and left the branch manager’s office.
He always felt a sense of accomplishment after completing something, but this time, a greater sense of accomplishment washed over him.
Buzz-
As he walked down the corridor with a smile, Dokyung’s mobile phone began to vibrate, and he quickly checked the screen.
[Choosing one of two paths at a crossroads is not such a difficult task.]
[What’s truly difficult is composing your own philosophy before that choice, and then implementing that choice afterward.]
[And Yoon Dokyung-ssi has perfectly accomplished both.]
The message once again sent a message as if to say Dokyung hadn’t been wrong.
[A reward befitting Yoon Dokyung-ssi’s activities will soon come.]
[This is the VIP service always cheering for you by your side.]
Suddenly, Dokyung chuckled at the thought that perhaps the greatest reward was that the message had chosen him.