PharmaResearch's stock surged after the company decided to halt the spin-off procedure for its transition to a holding company structure.
PharmaResearch shares traded at 543,000 won in the Korea Securities Dealers Automated Quotations (KOSDAQ) market at 10:58 a.m. on the 8th, rising 5.03% (26,000 won) from the previous day. During trading, the stock price rose to 575,000 won, marking an all-time high.
It appears that investors gathered, alleviating the governance risks that had recently weighed on PharmaResearch's stock. On this day, PharmaResearch held a board meeting and resolved to cancel the decision to partition the company. The company halted the spin-off procedure and also withdrew the partitioning plan.
PharmaResearch announced its spin-off plan on the 13th of last month. The structure involved dividing the company into a surviving entity called 'PharmaResearch Holdings (tentative name)' responsible for investments and a new entity called 'PharmaResearch (tentative name)' that would manage the existing aesthetic business. However, there was increasing criticism that the partitioning ratio and other factors favored the controlling shareholder. (☞ Angry retail investors over PharmaResearch's spin-off… “Favorable to controlling shareholders”)
PharmaResearch has maintained that it was pursuing the spin-off and restructuring into a holding company for risk management, but it seems to have shelved the partitioning plan as shareholder backlash grew.
Son Ji-hoon, CEO of PharmaResearch, expressed in a press release after the withdrawal of the partitioning plan, "I understand that there are shareholders who sympathized with and supported the intent of establishing a holding company, so I can empathize with the sentiment that this decision may feel disappointing." He added, "PharmaResearch seeks to humbly accept various opinions and aims to grow into a more shareholder-friendly corporation, so I ask for your understanding."
PharmaResearch stated it will not pursue the spin-off but will continue its existing management approach by accelerating its global aesthetic business focused on major markets such as the United States, Europe, Japan, and China, strengthening investment functions within the existing organization, preparing for strategic mergers and acquisitions (M&A), and building a transparent and sustainable governance structure based on ESG (environmental, social, governance) and compliance.