Center calls for full disclosure of LCY buyout deal

By Ted Chen  /  Staff reporter

Fri, Sep 07, 2018 - Page 12

The Securities and Futures Investors Protection Center on Wednesday urged LCY Chemical Corp (李長榮化工) to be more forthcoming about its takeover by KKR & Co ahead of its shareholders meeting.

LCY in July agreed to be bought out by a consortium led by New York-based KKR in an NT$47.8 billion (US$1.55 billion) deal.

The consortium, which includes LCY employees and LCY founding family members, is to purchase the company’s outstanding shares at NT$56 each — representing a 17.3 percent premium to the its closing price on July 20 — and then delist the company.

The stock closed unchanged on Wednesday at NT$51.80 in Taipei trading.

Investors should pay attention to a shareholders’ meeting at LCY taking place on Monday that would push the buyout case forward, the center said.

The meeting is to discuss the terms of a stock swap between LCY and a Taiwan-based unit of Carlton (Luxembourg) Holdings SARL, one of KKR’s subsidiaries, the center said.

LCY’s disclosure to investors has been inadequate and the center wishes to verify the price for the stock swap and the amount of shares in Carlton that would be allocated to former LCY chairman Bowei Lee (李謀偉), a member of the founding family, and other relevant interested parties, the center said.

While LCY’s independent directors have provided the center with a partial list of entities controlled by the Lee family and interested parties that would become Carlton’s new shareholders, they did not provide a full picture of the deal, it said.

Independent directors have verified that the Lee family holds a 27.8 percent stake in LCY through four investment entities, the center said, adding that only one of them — which is 98.28 percent controlled by Bowei Lee — would become a shareholder of Carlton.

Investors need more information to make better decisions and protect all shareholders’ interests, the center said.