South Korea’s mid-sized pharmaceutical company Kyung Nam Pharm Co. has selected KMH Group that engages in TV broadcasting and media business as the preferred bidder to become a majority stakeholder.
Kyung Nam Pharm announced Monday that KMH Group’s sound financial health, high management transparency and vast media infrastructure would help the firm broaden its retail network, enter the Chinese market and release new products.
Kyung Nam Pharm founded in 1998 is well-known in the country for its vitamin brand Lemona and athlete’s foot medication PM. It was listed on the nation’s secondary Kosdaq market in 2001. Lemona accounts for the largest share in the local market for vitamin C products. It has a wide distribution channel both online and offline including drug stores, big-box stores, convenience stores.
The drug maker has been put on the market after a series of struggles including the legal battle between the former chairman Lee Hee-chul who has been behind bars for accounting fraud and current management over management control. Its stock trading has been suspended since March this year for six months for breaking accounting rules.
In order to complete the buyout, KMH Group should acquire more than 900,000 in new issues worth 13.2 billion won ($12.3 million) in Kyung Nam Pharm plus convertible bonds worth 10 billion won. The deal is expected to cost the bidder at least 30 billion won given the premium in the CBs. Minority shareholders are protesting to the sale.
Shares of KMH closed Tuesday up 3.29 percent at 8,160 won.
By Kim Hye-soon and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]