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| The headquarters of Osstem Implant located in western Seoul / Newsis |
Osstem Implant stock price soars Wednesday over tender offer
By Anna J. Park
News of private equity firms planning to acquire the management rights of Osstem Implant caused shares of the dental implant material manufacturer to soar Wednesday. Osstem Implant is one of the world's largest dental implant makers.
The latest stock price surge followed the announcement earlier in the day by a consortium of Unison Capital Korea (UCK) and MBK Partners of their intention to acquire Osstem Implant's management rights through a tender offer. A tender offer is a bid that is typically made to purchase a publicly traded corporation from shareholders, asking them to sell their stock holdings at a specified price, usually at a premium.
Stock market investors favorably responded to the news by flocking to purchase the shares. The stock price finished at 186,300 won ($151), up 14.65 percent from the previous session. The stock price once reached 188,000 won, the highest ever since the company went public on the main benchmark KOSPI market in 2007.
The consortium's tender offer price is set at 190,000 won per share, and shareholders of the company can register themselves at NH Investment to sell their shares through the tender offer until Feb. 24.
Sources familiar with the deal explained that the price was determined by adding a 51 percent premium price to the average closing price of company shares in the three months prior to the tender offer launch date. The consortium is expected to purchase 15.4 percent of the firm's entire shares at the minimum during the period, or 71.8 percent at the maximum.
Given that the consortium already signed a deal with Osstem Implant's founder and Chairman Choi Gyu-ok last Saturday, agreeing to purchase a 9.3 percent stake in the company, the tender offer will be considered a success if the consortium succeeds at acquiring more than 15.4 percent of the entire shares through the process. Once the tender offer is completed, the consortium will be the dental material manufacturer's largest shareholder, followed by Choi, who will become the company's second-largest shareholder with a 9.6 percent stake.
Market watchers say the consortium's takeover of management rights is expected to be a great turning point for Osstem Implant's corporate governance improvement, which is what investors have long been asking of the firm. They view it as an opportunity for shareholders, who have been let down by an embezzlement disaster at the firm early last year, to make a successful exit from the investment, while Choi could recover his and the company's reputation.
Sources familiar with the deal also say UCK's special expertise at mid-cap buyout strategies will make synergy with MBK's strength in global networks.
"As Osstem Implant is an export company and top-tier implant material provider, MBK's strong global network is expected to stably support the firm's long-term growth and continuous R&D activities, while UCK's unparalleled dental industry insights will also provide the firm with solid future growth," a source from the local capital market told The Korea Times, Wednesday.
It's been said that UCK has been asking the chairman of Osstem Implant to sell his management right to improve the firm's corporate governance and internal control system, after the firm suffered a major blow from a company employee's embezzlement of some 200 billion won last year.
