Activist fund demands Namyang Dairy boost share price

• Published date: 01 March 2023
• Publication title: The Korea Times

Activist fund Tcha Partners Asset Management has launched a Namyang Dairy shareholder campaign urging the dairy company to take active measures to protect minority shareholders' rights.

According to Tcha Partners' proposals sent out the company boards earlier this week, the activist fund urged the firm to buy back 50 percent stakes of both common shares as well as preferred shares ? worth 191 billion won ($144 million) in total ? at the price of 820,000 won per share.

It is the price that Hahn and Co. agreed to pay per each stock, when the private equity firm signed a stock purchase agreement in May 2021 to acquire a 55.7 percent stake of the dairy company from the firm's founder and former Chairman Hong Won-sik.

"The proposal urging the firm to buy back the 190 billion won worth of common and preferred shares aims to provide an opportunity for exit to minority shareholders, who had been excluded from the stock purchase agreement of the firm's management rights in 2021," the activist fund's letter reads.

The activist fund, which owns a 3 percent stake in the dairy company, also called on the company to carry out a stock split of its preferred shares, in order to prevent delisting of them from local stock markets. Tcha Partners also urged the firm to pay out dividends of 20,000 won per common share and 20,050 won per preferred share.

Market watchers are paying attention to how the fund's shareholder campaign moves would affect the current entanglement involving...