On the 15th, Emart announced its intention to launch a tender offer for shares of its subsidiary, Shinsegae Food, as part of a voluntary delisting process. During a board meeting held on the 11th, Emart approved the tender offer for shares of Shinsegae Food. This follows a similar path as the voluntary delisting of Shinsegae Construction in February this year.
The tender offer price is set at 48,120 KRW per share, which is 20% higher than the closing price of 40,100 KRW on the trading day before the offer announcement on the 12th. Emart, which holds a 55.47% stake in Shinsegae Food, plans to acquire all publicly traded shares through this tender offer to make Shinsegae Food a wholly-owned subsidiary, followed by delisting according to the permissible legal procedures.
Emart stated that the action aims to resolve the structural undervaluation of Shinsegae Food in the stock market. However, it is also interpreted as an effort to simplify governance and decision-making processes.
Shinsegae Food faces challenging circumstances, similar to Shinsegae Construction, which recorded a negative performance for the group due to poor results. Earlier this month, Shinsegae Food sold its catering business, which accounted for 18% of total sales, to Gourmet Galleria, a subsidiary of Ourhome. Now, the company’s primary operations involve internal transactions, such as supplying bakery and food ingredients to Emart, Starbucks, and Shinsegae Department Store, but even sales to related parties like Starbucks are declining.
Emart plans to integrate Shinsegae Food as a wholly-owned subsidiary to streamline its decision-making processes and establish a quicker decision-making system. The tender offer period will run for a total of 22 days until January 5th of next year.