Corporate Legal Advisory Case | Advisory Provided on the Acquisition of a Listed Company Through a Tender Offer and Its Conversion Into a Wholly Owned Subsidiary

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.

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.

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.

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.

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.