Mom's Touch moves to the door upon accomplishing Kosdaq exist scheme

South Korean fast food restaurant chain operator Mom’s Touch & Co. is proceeding towards the exit of the country’s secondary Kosdaq stock market after the company and its biggest shareholder KL & Partners have secured nearly 98 percent, well above threshold for voluntary delisting.

Korea F&B Holdings Ltd., a special purpose vehicle set up by Seoul-based private equity firm KL & Partners, has upped its stake in Mom’s Touch to 77.56 percent while Mom’s Touch raised its treasury holding to 20.37 percent as of Feb. 15. Through purchase of 13,987,056 common shares in the open market over about a month, the two now command 97.9 percent, or 99,717,415 shares.

The largest shareholder with minimum 95 percent ownership can voluntarily pull out of the Kosdaq market.

Mom’s Touch will file for desilting with the Korea Exchange on March 30.

On Jan 20, the PEF and Mom’s Touch announced that they would buy the company shares at 6,200 won ($5.19) apiece, 19 percent above the previous session’s closing price, to delist the fast food chain operator.

Mom’s Touch shares surged by a daily limit of 30 percent on Monday to close at 8,220 won. Market analysts suspected that investors rushed to pick up the shares after the company disclosed on Friday it will continue to buy leftover shares in the market for the next six months after delisting. But they warned investors that they won’t pay beyond 6,200 won.

On Tuesday, Mom’s Touch shares fell 13.3 percent to 7,140 won before midday.

KL & Partners is reportedly removing Mom’s Touch from the stock market as part of its exit strategy.

Mom’s Touch fared well last year despite Covid-19 economic challenges. However, the PEF is said to have concluded that it would be more advantageous to delist the fast food chain after experiencing conflicts with franchisees who had been protesting to increase in ingredient prices.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]