Kyobo pledges to block 'hostile' takeover attempt by Affinity

Kyobo Life Insurance headquarters in Seoul / Courtesy of Kyobo Life Insurance

By Lee Min-hyung

Kyobo Life Insurance has pledged to block what it called a “hostile” attempt led by its financial investor, Affinity Equity Partners, to take over management control of the life insurer.

Kyobo said it held a regular shareholders' meeting last week where legal representatives from the Affinity consortium insisted that the insurer's top management, including Chairman Shin Chang-jae, meddled unfairly in a dispute over the firm's management rights.

The argument had nothing to do with the meeting's agenda, but the legal representatives kept raising the dispute which hindered the smooth progress of the meeting, Kyobo claimed.

The Affinity consortium is Kyobo's second-largest shareholder. Both sides have engaged in a years-long legal dispute on the pre-initial public offering (IPO) stock valuation of Kyobo. Affinity argued it could withdraw its capital invested in Kyobo unless the insurer went public by the end of 2015. But after Kyobo delayed the plan, the two sides have escalated their dispute over the proper pre-IPO stock valuation of the insurer.

Earlier, Kyobo shared its plan to go public by as early as the end of the first half of 2022 in a renewed IPO move to overcome the controversy.

But Kyobo argued that the Affinity consortium has exercised its put option in an unfair manner by seeking to overvalue Kyobo's pre-IPO stock price with a view to taking management control of the company.

“After the consortium exercised the put option back in October 2018, it has sought a chance to illegally take control of Kyobo's management and the intention was shown clearly during the recent shareholders' meeting,” Kyobo said in a statement.

The insurer also reiterated its strong willingness to take all measures possible to recover the trust and reputation of the company by blocking what it said was the consortium's greedy takeover attempt.