Park Sam-koo won’t exercise his right of first refusal to acquire a stake in Kumho Tire. The Kumho Asiana Group chairman has described the Korea Development Bank’s decision to prevent him from funding the acquisition through formation of a consortium as “unfair,” and as a result Kumho Asiana has opted against participating in the sale of the 42.01 per cent shareholding.
This means Doublestar Tire is first in line to purchase the Kumho Tire share. The Chinese tyre maker signed a stock purchase agreement with creditors in March, and it now has six months to close the KRW 955 billion (£668.1 million) deal with the nine creditors.
Park was required to exercise his right of first refusal by 19 April in order not to forfeit the sale, and the creditors requested he supply a plan that provided details of how he intended to fund his bid. The creditors will now negotiate with Doublestar Tire, however if the company doesn’t acquire the 42.01 per cent stake within the allocated timeframe, it will lose its preferred bidder status and Park will regain this right.
The Korea Herald states that use of the Kumho Tire trademark is a question that Doublestar and the creditors must first resolve prior to the acquisition further proceeding. Both sides have agreed to a maximum 20-year use of the Kumho Tire trademark, however this hasn’t yet been negotiated with trademark rights holder Kumho Industrial. The South Korean publication quotes Lee Sang-hyun, an analyst at IBK Securities, as commenting: “It is important for the Doublestar to use the trademark, as the Chinese tyre maker produces tyres for commercial vehicles. The Chinese firm may refuse to proceed with the deal or to pay the full price without access to the Kumho Tire trademark.” sg
Category: Company News