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Korea¡¯s leading tobacco company KT&G on Tuesday tried to take the sting out of a hostile takeover bid from the U.S. speculator Carl Icahn and partners by saying it is likely to accept one outside director the billionaire wants to force on the company. ¡°It is likely that one of the candidates recommended by Icahn and [U.S. hedge fund] Steel Partners will be voted in as an outside director for KT&G at the annual shareholders meeting on March 17,¡± KT&G president Kwak Young-kyoon said. ¡°We won¡¯t make an excessive effort to prevent this.¡±
KT&G¡¯s original plan was to fill both outside directorships with its own candidates. It apparently changed its mind after failing to muster sufficient support from foreign investors, who own around 60 percent of the company.
¡±KT&G has obtained around 40 percent friendly investors and Steel Partners and associates around 35 percent, according to our estimates¡±, Kwak said. ¡°But even if Steel Partners and associates succeed in putting one of their candidates on the board, it won¡¯t be enough to change the big picture in terms of company management.¡±
Having one of their own on the board will give Icahn and partners greater leverage in pushing their demands to improve shareholder value ? read boost stock price and dividends ? which have so far included asking the company to spin off its ginseng subsidiary.
Icahn and Warren Lichtenstein, the head of Steel Partners, had bought 6.59 percent of KT&G at the end of last year and late last month stepped up their takeover bid by offering to buy 20 percent of the company for W60,000 (US$60) a share, a gamble that drove the stock price up to W75,000 on the day.
(englishnews@chosun.com )
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