MBK Partners fails to acquire Hankook & Company

MBK Partners failed to acquire a controlling stake in Hankook & Company after its tender offer failed to secure enough subscriptions.

From left, Cho Hyun-sik and Cho Hyun-bum [JOONGANG PHOTO]

MBK Partners, Asia’s largest private equity firm, failed to acquire a controlling stake in Hankook & Company, the parent of Korea’s leading tire manufacturer, after its tender offer failed to secure enough subscriptions. “There was a meaningful subscription, but it could not reach our target,” MBK Partners’ MBKP Special Situation (MBKP SS), which was spearheading the public tender offer, said Friday. “Corporate structure reform is more important than anything. MBKP SS will continue to watch,” the entity said.

Though the subscription deadline falls on Monday, the deal technically fell through on Friday due to the Christmas holiday. MBK Partners had been calling for the corporate structure reform for Hankook & Company, which the firm has been seeking to secure a controlling stake in.

“Despite having a strong fundamental and potential for further growth, the corporate valuation of Hankook & Company has been declining due to its poor governance structure and the judicial risks from the largest investor,” MBKP SS said on Friday.

Hankook & Company has been embroiled in a sibling feud between its current chairman and his siblings — who teamed up with MBK Partners — over the control of the holding company. The private equity firm launched a public tender offer on Dec. 5 to acquire between 20.35 percent and 27.32 percent of the company.

The firm stressed that its public tender offer aimed to " improve the corporate governance structure.”

Investors had been betting against MBK Partners, which is aligned with Cho Hyun-sik, the eldest son of the owner’s family and adviser to Hankook & Company, and his two sisters, who are attempting to retake management control over their younger brother Cho Hyum-bum, the current chairman.

MBK and the older Chos butted heads with the chairman as well as Cho Yang-rai, their father and Hankook & Company Honorary Chairman, who weighed in on the issue in support of his youngest son.

BY SHIN HA-NEE, JIN EUN-SOO [shin.hanee@joongang.co.kr]