Share price jumped by 30% on the sale of all owners’ stakes
Possibility of additional acquisition and separate sale of affiliates
Criticism of’dogmatic’ even selling without compensation for damage
Namyang Dairy, which failed to overcome the Bulgarian crisis, was eventually sold to a domestic private equity fund (PE) Han & Company. Namyang Dairy’s stock price rose by nearly 30% based on the closing price on the 28th in anticipation of resolving the’owner risk’, but some point out that the owner made a profit by selling the company, but there was virtually no responsibility for compensation for damage to the store owner.
● Namyang Dairy’s stock is 30% higher… Will the Emperor’s Days Come Back?
According to the Korea Exchange on the 29th, the share price of Namyang Dairy Company closed at 570,000 won the day before, rising from 439,000 won to 131,000 won (29.84%) on the news of the sale of the shares of former chairman Hong Won-sik’s family. Namyang Dairy’s market capitalization increased by nearly 100 billion won to 4104 billion won in one day.
On the 4th, former chairman Hong took responsibility for the controversy over the efficacy of the Bulgaris Corona 19 and withdrew from the position of chairman. However, deteriorating public opinion such as the boycott did not easily subside, and in the end, the company sold all of its stocks (378,938 shares) to Han & Company. The total amount is 3107 billion won.
As an investor, it is a good news that a private equity fund, which will focus on profitability, purchases the right to operate the company. It is also mentioned the possibility of rekindling the days of’Emperor’s shares when the stock price exceeded 1 million won per share. Namyang Dairy’s stock price exceeded 1 million won until the 2013 crisis of pushing out agencies.
● Should Han & Company save Namyang Dairy… The possibility of additional acquisitions and separate acquisitions of affiliates
In the meantime, Han & Company has been reselling it by increasing its corporate value after acquiring insolvent companies. As a food company, after acquiring Woongjin Foods, which had a deficit in 2013, it has more than doubled its value and succeeded in selling it. After the purchase of Namyang Dairy, Han & Company said, “We will restore the trust of consumers and dealers and reborn as a new Namyang loved by aggressive investment and strengthening management transparency.”
The industry is paying attention to the possibility of additional acquisitions by companies with high business relevance. After the acquisition of Woongjin Foods, Han&Company increased its corporate value by additional acquisitions of Dongbu Farm Gaya and Daeyoung Foods. At the same time, the possibility of the sale of non-core assets is raised.
An industry insider said, “(Because it is important to generate a return (due to the nature of private equity)), there is a high possibility that the sale of affiliates or restructuring will follow.”
● Former Chairman Hong, holding 300 billion won in the sale price, “Let down your last pride”
Meanwhile, former chairman Hong revealed the reason for the sale of the stake by e-mailing to employees the afternoon of the previous day, saying, “My efforts are absurdly insufficient for normalizing management.”
He added, “The reality that the corporate value continues to decline, and the reality that I cannot confidently reveal that I am an employee of Namyang Dairy, I felt very heavy and sad as the largest shareholder. I decided to give up.”
However, some criticize that the process of selling the stock of the owner was also’dogmatic’. An agency owner of Namyang Dairy said, “In the end, there is no set compensation for damages to the store owners,” he said. “Isn’t the owner made an irresponsible decision this time,” he said.
Reporter Myeong Hee-jin [email protected]