CONTENTS
- 1. The Client Who Requested Corporate Legal Advisory
- - Detailed Background of the Case
- 2. Corporate Legal Advisory: Assistance From the Mergers and Acquisitions Attorney
- - Designing the Tender Offer Structure and Procedure
- - Advisory on the Share Acquisition Agreement and Legal Due Diligence
- - Advisory on Conversion Into a Wholly Owned Subsidiary and Delisting
- 3. Result of the Corporate Legal Advisory: “The Tender Offer and Share Acquisition Stably Completed”
- 4. The Necessity of Corporate Legal Advisory: The Tender Offer
- - Points for Companies to Note
- 5. The Necessity of Corporate Legal Advisory
1. The Client Who Requested Corporate Legal Advisory
Through corporate legal advisory, the client requested assistance with the tender offer as a whole in order to acquire shares of a listed company in which numerous shareholders and complex interests were intertwined and to stably advance the procedure for conversion into a wholly owned subsidiary.
Detailed Background of the Case
The client in this case is a domestic mid-sized company that reviewed a tender offer structure aimed at acquiring shares and converting the company into a wholly owned subsidiary in order to secure the core business of a listed company with which it had an existing cooperative relationship.
The target company had complex interests because numerous institutional and minority shareholders were involved, the scale of the transaction was large, and the structure was one to which various relevant statutes applied.
In that process, it was confirmed that the practical risks were considerable, including the disclosure requirements, the appropriateness of the purchase terms, the calculation of the share exchange ratio, and the approval procedures, and the client determined that the assistance of a specialized attorney was required.
Accordingly, in order to stably advance the complex procedure, the client requested corporate legal advisory regarding the tender offer as a whole.
2. Corporate Legal Advisory: Assistance From the Mergers and Acquisitions Attorney
In this case, the mergers and acquisitions attorney advised on the entire process of the transaction, including the design of the tender offer procedure, the review of the share acquisition structure, and the management of approvals and disclosures.
In particular, the attorney focused on minimizing the risk of shareholder protection issues and procedural defects and on securing the legal stability of each stage.
▶ Issues in the Case
ㅇ Managing the legal risks of the disclosure requirements and the approval procedures
ㅇ Reviewing the reasonableness of the share exchange ratio and the equity among the interested parties
ㅇ Satisfying the shareholder protection requirements and preventing procedural defects
Designing the Tender Offer Structure and Procedure
The mergers and acquisitions attorney designed the tender offer and disclosure procedures under the Financial Investment Services and Capital Markets Act as a whole.
By verifying the fairness of the tender offer period, the purchase price, and the terms, the attorney prevented regulatory risks such as false disclosure and unfair trading.
In addition, the attorney reviewed the legality of key documents, including the tender offer report, the disclosure wording, and the notices to shareholders, in order to ensure that no procedural defects arose.
Advisory on the Share Acquisition Agreement and Legal Due Diligence
Before the conclusion of the share acquisition agreement, which was the core of the transaction, the attorney led the due diligence to identify the financial and legal risks of the target company.
In this process, the attorney analyzed potential liabilities, litigation risks, and any violations of disclosure obligations and reflected them in the contract structure, thereby minimizing the possibility of disputes after the acquisition.
In addition, the attorney reviewed the risks of each contractual provision in detail and designed the structure so that the client's capital investment could be stably protected.
Advisory on Conversion Into a Wholly Owned Subsidiary and Delisting
After the tender offer, the procedures for a comprehensive share exchange of the remaining shares and for delisting followed.
The mergers and acquisitions attorney comprehensively managed the approval, disclosure, and reporting requirements under the Commercial Act and the exchange regulations and assisted in the process of consultation with each institution.
In addition, the attorney reviewed the calculation of the share exchange ratio and the board resolution procedure, thereby preventing in advance the possibility of legal disputes such as future shareholder objections.
3. Result of the Corporate Legal Advisory: “The Tender Offer and Share Acquisition Stably Completed”
Through the mergers and acquisitions attorney's legal advisory, the tender offer and share acquisition procedures were stably completed within the planned schedule.
The client secured the shares of the listed company in stages and achieved conversion into a wholly owned subsidiary, and the delisting procedure was also approved without delay.
Through this, the client was able to minimize legal risks throughout the entire transaction and to efficiently secure the company's shares in a structure suited to the purpose of the acquisition.
4. The Necessity of Corporate Legal Advisory: The Tender Offer
A tender offer is a procedure in which, in order to secure a large quantity of a listed company's shares, the purchaser discloses a set period and terms and purchases shares from an unspecified number of shareholders.
This is used for various purposes, such as securing management control, acquiring a company, and reorganizing governance structure, and it generally offers a purchase premium higher than the market price.
A tender offer ensures transparency and fairness in that it presents the same terms to all shareholders, but it entails complex regulatory procedures and a heavy financial burden.
▶ Main Types
Friendly Tender Offer
A form pursued with the consent of the target company's board of directors or major shareholders
Hostile Tender Offer
A form conducted for the purpose of securing management control without the consent of the target company
Partial Tender Offer
A method of purchasing a portion of the issued shares
Full Tender Offer
A method targeting all of the issued shares
Conditional Tender Offer
A form that takes effect only when certain requirements are met
Points for Companies to Note
A tender offer is a complex procedure in which multiple statutes, such as the Financial Investment Services and Capital Markets Act, the Commercial Act, and the Monopoly Regulation and Fair Trade Act, operate simultaneously.
Because the formal requirements are strict at each stage, including reporting, disclosure, approval, and share transfer, careful review is required.
Whether a tender offer obligation arises must be reviewed in advance, and failure to file may carry the risk of a penalty surcharge or criminal punishment.
② Management of Disclosure and Approval Procedures
Because an omission or delay in disclosure may be regarded as unfair trading, the schedule and requirements must be thoroughly managed.
③ Appropriateness of the Purchase Price
If the basis for calculating the premium relative to the market price is unreasonable, shareholder disputes may arise.
④ Compliance With the Principle of Shareholder Equality
Because presenting favorable terms to a particular shareholder may result in legal sanctions, fair terms are essential.
⑤ Reporting Obligations to Regulatory Authorities
Depending on the shareholding ratio, additional obligations such as a business combination filing or a foreign investment report may arise.
5. The Necessity of Corporate Legal Advisory
In the process of a tender offer or a share acquisition, commercial law judgments such as securing management control, adjusting the shareholding ratio, and the timing of the transaction must be considered together with capital market regulations.
Because the consultation structure among the interested parties, the timing of disclosure, and the design of the contract terms are intertwined in a complex manner, it is difficult to ensure the stability of the transaction through a simple legal review alone.
Drawing on extensive transaction experience and practical know-how, this firm coordinates complex procedures in an integrated manner and ensures stability by anticipating the risks at each stage and designing an optimal acquisition structure.
In addition, through cooperation with specialized personnel such as accountants, tax accountants, and patent attorneys, a multifaceted approach that takes into account various areas, including finance, taxation, and intellectual property rights, is possible, allowing the firm to provide strategic assistance.
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