South Korea's KT&G Corp yesterday rejected an unsolicited takeover bid by a group of investors led by US billionaire Carl Icahn.
"The board of directors determined that it does not help maximize interests of the company and shareholders to accept the proposal," KT&G said in a statement.
Icahn and other investors had last week proposed in a letter to chief executive Kwak Young-kyoon an offer of 60,000 won (US$62) a share for the company, which produces tobacco products and items related to the ginseng root, popular in Asia for its perceived health benefits.
PHOTO: AP
The offer values the company at about 9.57 trillion won (US$9.9 billion).
But Kwak said yesterday the board had unanimously rejected the proposal "as conditional and lacking any certainty as to structure, timing, financing or future plans for the company."
"The board believes that the company's focus should be on continuing to build on its existing strengths and capitalizing on current and future business and financial opportunities," Kwak said, according to the statement.
If the takeover attempt is successful, it would be the first unsolicited buyout of a major South Korean firm by overseas investors.
Three funds controlled by Icahn -- including Icahn Partners Master Fund LP and another fund, Steel Partners II LP -- have become the second-largest holders of KT&G, amassing about 6.7 percent of the company's total shares, some 10.7 million, since last year.
The investors said they were "disappointed" with the board's rejection of the bid.
"Their decision once again highlights the board of directors' disregard for the interests of KT&G investors," Jason Booth, a spokesman for Steel Partners, said in a statement.
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