This article was published on July 8, 2025, at 4:19 p.m. on the ChosunBiz MoneyMove site.
Taiwanese investment firm Kaiyu Investment, the largest shareholder of Woongjin Food, has once again initiated an off-market purchase of Woongjin Food shares. This is the second challenge following a prior failure last February due to the indifference of minority shareholders, with a goal to acquire over 4.92 million shares and secure nearly 90% equity.
According to the financial investment industry on the 8th, Kaiyu Investment recently finalized its policy to acquire additional shares of Woongjin Food and sent notifications for off-market purchases of Woongjin Food listed common stocks to minority shareholders. The plan is to purchase up to 492,7454 shares at 2,300 won per share, with Shinhan Investment Corp. handling the transaction.
Kaiyu Investment aims to increase its equity in Woongjin Food, currently about 80.47% (including special related parties), to around 88% through the off-market purchase of common shares. Subscriptions will be accepted until the 18th of next month, with payment scheduled two days later on the 20th. The total amount for the share buyback is set at approximately 11.3 billion won.
Kaiyu Investment has been an investment specialist for Taiwan's largest food and distribution company, Uni-President Group, since it became the new owner of Woongjin Food in March 2019. At that time, it acquired 74.5% of the management rights from domestic private equity firm Hahn & Company for 5,295 won per share, totaling 260 billion won.
Woongjin Food, established by acquiring Dongil Industries by Woongjin Group, started in 1987. It introduced hit products like "Morning Sunshine" and "Green Plum," but faced liquidity crises due to the bankruptcy of Woongjin Group's affiliate, Geumdong Construction, leading to a sale process in 2013. It changed hands twice, finally reaching Kaiyu Investment.
Kaiyu Investment brought up the expansion of shareholder rights for the purpose of off-market purchase of Woongjin Food stocks. Since Woongjin Food is an unlisted company, it has a unique share structure where 19.53% of the total shares are held by minority shareholders. During the first large-scale off-market acquisition attempt in February last year, the company also cited strengthening its control as the reason.
At that time, Kaiyu Investment aimed to increase its equity from 79.32% to 90% by off-market purchasing 6,569,938 shares held by minority shareholders which were granted to employees and dealers when Woongjin Food was part of Woongjin Group, but due to the indifference from minority shareholders, it only managed to secure an additional stake in the 1% range.
Despite being an unlisted company, there were evaluations that this was an escape opportunity for minority shareholders who had been marginalized during the acquisition and merger process, but the low purchase price per share became a reason for the indifference. The purchase price per share was less than half of the price set during the major shareholder change five years ago.
In the meantime, Woongjin Food's performance has improved. Revenue based on consolidation increased from 223 billion won in 2018 to over 328 billion won in 2023, surpassing the 300 billion won mark, and it recorded a further increase last year to 336.1 billion won. Last year's operating profit was approximately 11.6 billion won.
In the market, there are observations that the chances of success for this off-market purchase are not high again, as Kaiyu Investment has priced its shares at the same 2,300 won per share as last year. The securities industry speculates that securing an additional stake in the 1% range may not be easy this time.
A source from the securities industry noted, "It won't be easy to secure additional shares from minority shareholders who may have forgotten about their holdings or were unaware of the off-market purchase attempt," adding, "Last year, they set the purchase price by selecting companies like Dongseo and LOTTE Chilsung Beverage as comparison firms, but this year even that explanation was omitted."