Green Cross moves to acquire Ildong

By Lee Hyo-sik

Green Cross, Korea’s second-largest pharmaceutical company, is demanding Ildong Pharmaceutical grant it rights to appoint an outside director and auditor in what is seen as a move to take over the ninth-largest drug maker.

Green Cross is Ildong’s second-largest shareholder with a 29.36 percent stake, while Ildong Chairman Yoon Won-young and his family members have a combined 32.52 percent.

Green Cross said Monday that the company asked Ildong management to appoint two people it recommended as the latter’s board members, an outside director and an auditor. Of Ildong’s 10-member board of directors, the terms for three will expire in March.

The drug maker will hold a meeting of its board of directors on Feb. 26 and a shareholders’ meeting in March. If Ildong refuses to accept the demand from Green Cross, the two will likely clash at the former’s annual shareholders’ meeting.

In March 2014, Green Cross opposed a plan submitted by Ildong management to introduce a holding company structure. The scheme failed to get the green light from shareholders because Green Cross opposed it.

Green Cross’s latest move is widely seen as a prelude to its full-blown attempt to acquire Ildong. Shares in Ildong hit the daily limit high 15 percent Monday, closing at 19,550 won as investors snatched up company stocks on expectations of a possible takeover.

“We publically said we intend to be involved in Ildong’s management in January 2014 when we acquired 12.57 percent in company shares from an individual investor,” a Green Cross spokesman said. “We are exercising a legitimate right as a shareholder, demanding Ildong give us rights to appoint some of its board members.”

But the spokesman cautioned against the growing speculation that Green Cross will soon attempt to take over Ildong. “At the moment, we are not considering acquiring Ildong. What we want to do now is to create synergy by boosting cooperation.”

Ildong said it does not want to discuss Green Cross’s latest move, citing the sensitive nature of the matter.

“At the moment, I have nothing to say about Green Cross’ request,” an Ildong spokesman said. “It is really hard for us to comment on the issue publicly. We don’t want anyone to know what we are going to do.”