[Edaily Reporter Kim Kyung-eun ] Activist fund Align Partners Asset Management announced on the 22nd that it has officially requested that the board of directors of GABIA, Inc.(079940) negotiate an increase in the tender offer price and explore potential acquirers. The firm argues that since Macquarie Asset Management’s tender offer for GABIA, Inc. is effectively a “going private” transaction premised on delisting, the board must take steps to maximize the interests of all shareholders.

Align Partners sent an open Seohan titled “Request for Measures to Protect Shareholder Interests Regarding the GABIA Tender Offer” containing these details to GABIA, Inc.’s board of directors the previous day. The firm requested an official response by the 31st and stated that if a satisfactory response is not provided, it will consider follow-up measures permitted under the Commercial Act and the Capital Markets Act.

Align Partners argued that while this transaction appears to be a third-party tender offer on the surface, it effectively constitutes a “going private” transaction because the controlling shareholder will reinvest the proceeds from the sale to retain management control even after the transaction. Consequently, they pointed out that stricter fairness procedures are required compared to typical mergers and acquisitions (M&A).

To this end, they demanded the formation of a special committee led by outside directors independent of both the controlling shareholder and the acquirer, tasked with reviewing the tender offer, conducting negotiations, and expressing an opinion. They also emphasized that the committee should not merely review the appropriateness of the tender offer price but should negotiate with the acquirer to secure more favorable terms, such as an increase in the tender offer price.

They also called for a “market check” or “go-shop” process to identify other potential acquirers—besides the current bidder—who could offer a higher price or more favorable terms, as well as for an independent external financial expert to verify whether the tender offer price appropriately reflects the company’s intrinsic value.

Align Partners also raised concerns regarding the participation of directors with conflicts of interest in voting. They argued that directors who plan to maintain management control after the transaction by selling their shares and reinvesting should be excluded from both the special committee and the board of directors’ deliberations and resolutions regarding the tender offer.

Furthermore, they demanded disclosure regarding the scope of due diligence conducted by the acquirer, the materials provided by the company, and whether the provision of such information was approved by a board resolution. They also requested that the company refrain from expressing any opinion encouraging shareholders to tender their shares under the current terms of the tender offer until the price fairness review, negotiations with the acquirer, and the Go-Shop process are completed.

An official from Align Partners stated, “This open Seohan to shareholders outlines specific measures the board of directors must actually implement, along with related inquiries,” adding, “If we do not receive sufficient responses, we plan to actively consider follow-up measures permitted under the Commercial Act and the Capital Markets Act as shareholders.”