이 기사는 2021년 08월 03일 08시03분 thebell에 표출된 기사입니다

South Korean buyout firm Hahn & Co, a proposed buyer of a controlling stake in Namyang Dairy Products, may take a legal action against Namyang ex-chairman Hong Won-sik as the company delayed the process for the contract.

This comes as Namyang said in its regulatory filing that the company postponed its extraordinary shareholders’ meeting scheduled for July 30 to September 14. Hahn & Co immediately expressed regret over the seller for the unilateral decision. It said that was an obvious violation of the contract and it will consider all measures including legal action.

Hahn & Co and Namyang reportedly set the performance guarantee higher than usual during their negotiations, according to industry sources. It is said that Hong requested a larger amount of performance guarantee to prevent Hahn & Co from pulling out of the deal.

A 5-10% of a transaction price is normally paid as a penalty if one cancels a deal after an agreement. In May, Hong and the owner family agreed to sell a controlling 53% stake in the company to Hahn & Co at 310.7 billion won ($270.3 million). Assuming the two sides had agreed to pay 10% as a penalty, the sellers have to pay 31 billion won.

Hahn & Co, however, is unlikely to just drop the acqusition after receiving a penalty of only tens of billions of won.

It is widely believed that the PE firm will put utmost efforts to close the deal because the cancellation of the deal will damage its reputation.

“(If the deal fell through) overseas institutional investors of Hahn & Co’s fund could review whether there were any problems during the transaction process and negotiations with Namyang,” said a source from the private equity industry.

Some market insiders said that Hahn & Co may file a lawsuit for damages due to a delay in the transaction apart from a lawsuit for violation of the transaction contract.

The PE firm’s possible a lawsuit against the owner family of Namyang is expected to lead to a fierce competition among legal advisors to win a role to represent the two sides. In the Namyang deal, Kim & Chang has provided both the owner family and Hahn & Co with legal advice. (Reporting by Gyoung-tae Kim)