Alphabiz - E-Mart Fails to Secure Sufficient Shares in Tender Offer to Delist Shinsegae Food

Photo courtesy of Yonhap News

[Alpha Biz= Paul Lee] E-Mart has failed to acquire its targeted stake in Shinsegae Food after receiving insufficient shareholder participation in a tender offer aimed at delisting the subsidiary.

According to a filing with the Financial Supervisory Service’s electronic disclosure system on Jan. 7, E-Mart conducted a tender offer for Shinsegae Food shares from Dec. 15 through Jan. 5. A total of 425,206 shares were tendered, accounting for approximately 29% of the planned purchase volume of 1,467,319 shares.

To proceed with delisting, a company must meet the requirement of becoming a wholly owned subsidiary by securing at least a 95% stake. Prior to the tender offer, E-Mart held 2,148,133 shares, or 55.47%, of Shinsegae Food. Following the tender offer, its stake increased to 2,573,339 shares, equivalent to 66.45%. Including treasury shares held by Shinsegae Food—amounting to 257,029 shares, or 6.64%—E-Mart’s effective ownership stands at approximately 73.10%, well short of the delisting threshold.

The tender offer price was set at 48,120 won per share, representing a 20% premium to the previous trading day’s closing price. However, market observers believe resistance from minority shareholders limited participation. The offer price implied a price-to-book ratio (PBR) of 0.59, meaning the valuation was less than half of the company’s book value, which may have discouraged shareholders from tendering their shares.

As a result, the market expects E-Mart to pursue additional stake acquisitions through a comprehensive share exchange rather than launching another tender offer. A comprehensive share exchange, as stipulated under the Commercial Act, allows a parent company to acquire shares from a subsidiary’s shareholders in exchange for cash.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)