NOVEL NEXT WORLD 31
“How long has it been?”
Two weeks later, in a conference room at a hotel somewhere in Gwanghwamun.
The Vice Chairman of DU, visibly irritated, turned to the president and planning director seated beside him and asked:
“It’s been 20 minutes.”
“These people have no basic manners.”
Two weeks ago, the Steellife side had reached out, suggesting they have an open and honest dialogue to resolve everything.
It seemed that rumors had spread about DU securing shares from domestic institutions as white knights, making Steellife believe they no longer had the upper hand.
“I think it might be some kind of strategy.”
“Is this what passes for strategy when they’re at a disadvantage?”
DU had agreed to meet, considering the other party’s position. They intended to use this meeting to quietly advise the opposition to withdraw.
The planning director pressed his lips together at the Vice Chairman’s words.
Time dragged on aimlessly.
“It’s been 40 minutes past the agreed time,” the Vice Chairman said, his face flushed red.
“We came here for dialogue, but they’ve kicked it away. The moment we leave this hotel, send out a press release. Tell them we’ve secured all the shares from domestic institutions.”
The Vice Chairman stood up, as if no longer seeing any need to respect the other party.
Just as the three were about to leave the hotel, the door opened and a group of foreigners entered the room.
“Ah! I apologize.”
The man at the front smiled as he offered his apology.
“I’m Dan Levy, CEO of Steellife. I’m sorry we’re late. The jet lag has been quite challenging.”
The Vice Chairman’s eye twitched at the Steellife representative’s words.
From his well-rested appearance to his freshly pressed hair, everything about him suggested he had just enjoyed a good night’s sleep.
Anger surged through the Vice Chairman.
“Kang Myung-hwan, Vice Chairman of DU.”
Striving to maintain his composure, the Vice Chairman accepted the business card offered by the Steellife representative and handed over his own.
“Did you sleep well?”
Though the Vice Chairman’s tone and expression remained calm, his words carried a sharp edge.
“It seems we’ve disturbed your rest. We’ll be going then.”
As the planning director finished translating his words, the Vice Chairman turned to leave.
“Vice Chairman.”
As the DU group was about to exit the conference room, the Steellife representative called out to stop the Vice Chairman.
“If you leave now, you’ll regret it.”
“What did you say?”
The Vice Chairman snapped, unable to contain himself any longer.
At this reaction, the Steellife representative smirked and pulled out a sheet of paper from his jacket.
“This is a proxy statement that just arrived from Hong Kong.”
The Vice Chairman nodded at Steellife’s words, and the planning director took the document to read.
“Core Partners has delegated their 4.47% of DU’s listed shares to Steellife.”
As those words left the planning director’s mouth, shock registered on the faces of the Vice Chairman and president.
“Didn’t Core Partners say they were neutral?”
“Th-they did say that when we approached them,” the president stammered, clearly flustered.
The Steellife representative seemed determined not to miss this reaction.
“Oh my, you seem surprised. DU has received proxy rights from Korean institutions, correct?”
This information was already widely circulating in the industry.
“Well, if we were to have a showdown over shares, we’d be about 2% short, but…”
Calculating the friendly shares on each side, DU had 40.67% while Steellife had 38.51%.
DU was ahead by about 2%, but…
“Do you think individual investors will side with DU? It seems like that 6.24% of shares will be added to our side.”
The Vice Chairman finally understood why they had been acting so arrogantly.
“Now then, shall we sit down and have a proper conversation?”
The Steellife side took their seats at the conference table, gesturing for DU to sit across from them.
“Vice Chairman…”
As the president looked at him with worried eyes, the Vice Chairman sighed deeply and sat down across from them once again.
Satisfied with this, the Steellife side smiled and began to speak.
“The team leading this project suggested we demand an extraordinary shareholders’ meeting.”
The Steellife representative sat in a relaxed posture, observing the DU Vice Chairman.
“However, since our sole purpose was to improve management practices, I wanted to give the current DU management a chance.”
Despite having fewer friendly shares than DU, the other side continued to emphasize that they were the ones giving DU an opportunity.
But DU wasn’t in a particularly advantageous position either.
In a hostile takeover, the defending side had more to lose.
“Our demands are simple.”
“Go on.”
“Appoint the individuals we recommend as outside directors.”
The Vice Chairman heaved a long sigh at the Steellife representative’s words.
The list of outside director candidates they had recommended flashed through his mind.
“All three of them?”
“That’s correct.”
After a moment of contemplation, the Vice Chairman looked at his opponent, seemingly having made a decision.
“We’ll accept one.”
“V-Vice Chairman.”
The president called out to him, but the Vice Chairman appeared to have already made up his mind.
If this went to an extraordinary shareholders’ meeting, they couldn’t guarantee a win.
“Just one?”
“That’s right. It’s the most we can concede.”
The Steellife representative looked at his team members on either side, and they nodded.
“Alright.”
As soon as he agreed, the Vice Chairman let out a sigh of relief, as if a great burden had been lifted.
“Then, based on this, we’ll draft an agreement…”
“There’s one more thing.”
“What do you mean, one more thing?”
“Yes. Please amend the company’s articles of incorporation at the regular shareholders’ meeting in three months.”
The articles of incorporation were like a constitution for a company. The company had to be run according to these articles, and if they were violated, causing harm to the company, those responsible could be held liable for damages.
“Amending the articles…”
“Anyone who has received a sentence of imprisonment or heavier punishment cannot be a member of the board of directors.”
Imprisonment referred to confinement in a detention center or prison.
In other words, if someone received a court sentence and was imprisoned, they couldn’t join DU’s management.
It was clearly targeting the current chairman, who was detained in custody.
“I hope you understand that this is non-negotiable.”
As Steellife made it clear they wouldn’t back down, the Vice Chairman, who had been holding back, clenched his jaw and stood up.
“Then consider the negotiations off.”
With those words, the Vice Chairman strode out of the conference room, followed by the other DU representatives.
“Hahaha.”
As the conference room door slammed shut, the Steellife representative burst into laughter.
“Looks like we’ve achieved our goal.”
In truth, they hadn’t come to this meeting to negotiate.
They had wanted this exact situation and came prepared for it.
“Michael, your advice was spot on. With his hair pressed down like that, his face turned so red.”
The Steellife representative smiled, clearly satisfied with how things had unfolded.
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“DU: ‘Secured friendly shares from 8 institutions including Taesan Securities, confident in defending management rights.'”
“DU: ‘Steellife’s unreasonable demands have gone too far. No more negotiations.'”
“Steellife: ‘Our demands are simple. We cannot allow criminals to run businesses.'”
“Steellife: ‘We stepped back with demands for management improvement, but DU refused. We will take over management rights.'”
“Disagreement in negotiations… DU acquisition battle intensifies. Stock price rises 19% in a single day.”
[DU +31.84%]
Dokyung checked the average profit rate of the clients he managed.
The message had informed him that DU’s stock price would rise, and as soon as he finished his analysis, he persuaded his clients to buy DU shares.
And over the course of two months, the stock price that had been rising sluggishly exploded upward as soon as news broke that negotiations between the two groups had failed.
“Couldn’t it have risen this easily a bit sooner?”
Dokyung smiled at Choi Woojin’s words. Choi Woojin was now comfortably seated in Dokyung’s office as if it were his own.
“No client appointments today?”
“Nope. Clients aren’t even calling. I bet they’re all happily checking their accounts right now.”
Dokyung nodded. His own clients had been calling since morning, eager to praise him.
And they all had just one question:
‘When should we realize our profits…?’
With the stock price rising over 30%, clients naturally wanted to secure their current profits.
After all, the price could drop tomorrow.
However, Dokyung persuaded them that there was still room for the stock to rise further.
Of course, despite his persuasion, he sold and cashed out the shares of clients who insisted on selling.
“So, how long do you think this will go on?”
“The show hasn’t even started yet.”
Choi Woojin chuckled at Dokyung’s response.
“It’s truly dazzling. Even though everyone knows what they’re up to.”
Steellife and Carl Sutton’s strategy was flashy and spectacular.
Even though their methods were well-known, it seemed DU’s management had been caught up in their pace.
The stock price rising as soon as news broke that the negotiation channel had closed was proof of that.
Now it was truly a battle of who could secure more proxies.
“The market is reacting too.”
If that was the case, both groups would strive to secure the shares available in the market. It was only natural for the stock price to rise if they started acquiring shares.
The current rise in stock price was due to everyone’s intention to buy DU shares early and sell them at a premium later.
“Was it the Saturday night show you mentioned?”
“Yes. To be precise, it’s called the Saturday Night Special.”
The Saturday Night Special was one of the strategies in hostile corporate takeovers.
“What’s supposed to come out of Carl Sutton’s IR?”
“He’ll declare a tender offer.”
In a hostile takeover, a tender offer (ToB, Take over Bid) was the attacking side’s trump card that could choke the opponent.
It was a declaration to purchase shares over-the-counter regardless of the current stock price in order to secure voting rights.
Typically, they offer to buy at a price 20-30% higher than the closing price on the day of the tender offer announcement.
“Wow. As expected of Carl Sutton, he’s playing big.”
As Choi Woojin said, this was a method only hedge funds with substantial financial resources could employ.
From the moment the tender offer is announced, the shares available in the market will dry up, and the stock price will skyrocket.
“Then I guess it’s about time to set an exit target?”
“Let’s wait and see Carl Sutton’s announcement today.”
“It should be coming out right about now.”
It was 9 PM in New York, on the other side of the globe, and the results of the IR should be coming out soon.
Bzzt-
As Dokyung looked up at the clock on the wall, both of their phones started vibrating simultaneously. Dokyung and Choi Woojin checked their phone screens.
“Carl Sutton: ‘Participating in DU acquisition. $3 billion (approx. 4 trillion won) funds prepared.'”
“Carl Sutton: ‘Interested in DU’s long-term success. Will secure management rights in alliance with Steellife.'”
“Carl Sutton: ‘Will proceed with tender offer. Expecting 20% premium on stock price.'”
“DU acquisition battle: Carl Sutton, who was commanding from behind the scenes, steps to the forefront.”
The messages were from a chat room providing breaking news. Choi Woojin smiled as he looked at Dokyung.
“There it is. 20% is pretty good. What should we set as the target…”
Choi Woojin’s words trailed off as he noticed Dokyung’s expression.
Dokyung’s brow was furrowed.
“Assistant Manager Choi Woojin.”
“Huh? What is it?”
“I think we need to move up our exit strategy.”