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Hahn & Co files lawsuit against Namyang for breach of contract Buyout firm says Namyang calls for new prerequisites

Translated by Kim So-in 공개 2021-09-01 08:13:40

이 기사는 2021년 09월 01일 08:12 더벨 유료페이지에 표출된 기사입니다.

South Korean buyout firm Hahn & Co, a proposed buyer of a controlling stake in Namyang Dairy Products, has filed a lawsuit against Namyang and its ex-chairman Hong Won-sik as the company delayed the process for the contract.

Hahn & Co said on Monday that it has tried everything for the past several weeks to ensure that the transaction is closed smoothly through consultation and persuasion, but it is believed that it would be difficult to close the deal due to the seller's unexplained delay in contract execution and excessive demands.

Hahn & Co also said that the proposed sellers have offered negotiations with a new set of prerequisites to reach the deal after remaining silent for more than two weeks. The proposed sellers responded that Hahn & Co had breached the nondisclosure obligation.

Market watchers said the possible legal dispute between Hahn & Co and Namyang may be due to a low price tag. A combined value of Namyang’s cash and cashable assets stood at 369.3 billion won ($319 million), above the price of a 52.63% stake. Shareholders including Hong and Hahn & Co in May agreed to exchange the controlling 52.63% stake in Namyang for 310.7 billion won.

There was speculation that Namyang initially intended to terminate the contract at the extraordinary general meeting on July 30, but it decided to postpone the deal closing and negotiate with a new potential buyer as the new potential buyer offered a higher bid.

Hong said in a statement earlier this month that the extraordinary shareholders meeting was postponed because the two parties were not fully prepared to complete the deal. A new set of prerequisites offered by the proposed sellers has not been revealed yet, but it is highly likely to be related to positions of Hong’s two sons, Jin-seok and Beom-seok, who are executives of the company. (Reporting by Seon-ho Kim)
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