[Edaily Reporter Kim Kyung-eun ] On the 18th, Align Partners Asset Management described the failure of Macquarie Asset Management’s tender offer for GABIA, Inc.(079940) as “a highly unusual and significant case in the capital markets.” The firm argues that if Macquarie wishes to pursue a voluntary delisting in the future, it must offer general shareholders terms that are more favorable than those previously proposed.

Align Partners issued a statement that day, saying, “This outcome demonstrates that the success of a transaction cannot be guaranteed by the consent of the controlling shareholder alone, and that it is crucial to establish fair terms acceptable to minority shareholders.”

DCK Investment, a special purpose company (SPC) affiliated with Macquarie Asset Management, conducted a tender offer for shares of GABIA, Inc. at 48,000 won per share from July 20 to the 17th of this month. Although the minimum target volume was 3,267,629 shares, the actual number of shares tendered was only 721,413, causing the tender offer to fail. Under the condition that no shares would be purchased if the minimum volume was not met, the actual purchase volume was 0 shares. As a result, Macquarie’s plan to acquire control of GABIA, Inc. and delist the company has inevitably been disrupted.

Align Partners argued that, during the tender offer process, GABIA, Inc.’s board of directors did not make sufficient efforts to ensure fair procedures and the best possible terms for minority shareholders.

Align Partners pointed out, “There are concerns about a structural conflict of interest in a transaction where the existing management retains the opportunity to participate in management and benefit from future value appreciation through reinvestment, while minority shareholders receive cash and their investment relationship is completely terminated,” adding, “The board of directors must secure fair procedures and the best possible terms for minority shareholders through independent valuation and negotiations.”

They also reiterated that the GABIA, Inc. Special Committee had recommended that the board issue a neutral opinion, noting that the committee had limitations in assessing the appropriateness of the tender offer price. The Special Committee pointed out that there was a discrepancy in the economic interests between the controlling shareholder and the general shareholders, and that an independent corporate valuation had not been conducted.

Align Partners emphasized, “Ultimately, only approximately 5.4% of the total issued shares and approximately 7.4% of the shares subject to the tender offer were tendered, failing to secure the shareholder approval required to complete the transaction.”

They made it clear that if efforts to delist GABIA, Inc. are pursued in the future, the terms of the tender offer must be improved. Align Partners stated, “GABIA, Inc.’s common shareholders, who will receive cash and terminate their investment relationship, must be guaranteed better terms than before,” adding, “Considering the dual-listing structure, solutions must also be devised to protect the interests of common shareholders in other listed subsidiaries and sub-subsidiaries, such as KINX, Inc.”

To address concerns regarding the independence of GABIA, Inc.’s board of directors, Align Partners requested the convening of an extraordinary general meeting of shareholders and proposed the appointment of two additional independent directors and one additional non-executive director.

Align Partners added, “We will continue to strive to resolve GABIA, Inc.’s dual-listing issue and ensure that the interests of all shareholders are fairly protected in major decision-making processes, including voluntary delisting.”