President Lee Jae-myung emphasized reforms against unfair practices in financial markets during a capital market policy meeting. Regarding the mandatory tender offer system, which gives minority shareholders an opportunity to sell their shares during corporate mergers and acquisitions (M&A), he also conducted an impromptu on-site vote to gather opinions.
Kang Chungwan reports.
[Reporter]
President Lee Jae-myung visited the Korea Exchange in Yeouido, Seoul, wearing a red tie that symbolizes rising stock prices.
A wide range of measures to normalize capital markets were discussed, and one of the key issues was the “mandatory tender offer system.”
Currently, in M&A, buyers only need to acquire the controlling shareholder’s stake with a management premium added.
Because of this, controversy over discrimination against minority shareholders has persisted.
The mandatory tender offer system promoted by the ruling party requires an acquirer to purchase shares of minority shareholders at the same price, and the key debate is what percentage of total shares should be subject to mandatory purchase.
The current government proposal leans toward obligating the purchase of at least 50% plus one share of total equity, combining the major shareholder’s stake and the minority shareholders’ portion. However, within the Democratic Party, there are many opinions that 100% of the shares minority shareholders wish to sell should be purchased.
[Lee Hyo-seop / Research Fellow, Korea Capital Market Institute: If a 100% full buyout is made mandatory, M&A activity will shrink, so we should first implement the 50% + 1 share system and strengthen it in phases.]
[Kim Woochan / Professor, Korea University Business School: Globally, there is no country that proposes a tender offer of 50% + 1 share (rather than a 100% mandatory tender offer ratio).]
President Lee proposed an impromptu on-site vote between the two options.
[President Lee Jae-myung: Let’s hold a vote. How is it? Are there more for Option 1 (100% purchase), or Option 2 (50% + 1 purchase)?]
Although the vote showed more support for the 100% purchase proposal, President Lee noted that the party should continue discussions, while placing weight on market normalization through revitalizing M&As, saying that he is “on the side of growing the pie even if criticized.”
(Video: Jeong Sang-bo, Ha Ryung | Video Editing: Jang Hyeon-gi | Design: Kang Yun-jeong, Lee Ga-jin)
※ Please note: This article was translated by AI and may contain errors.