Hong Kong-based Affinity Equity Partners is set to extend its tender offer for South Korean food container maker Lock&Lock Co. shares as the private equity firm failed to secure more than a 95% stake in the company through a first-round bid due to the offer price lower than minority shareholders’ expectations.
According to Lock&Lock’s regulatory filing on Thursday, Affinity started a second-round tender offer on May 16 to buy a 14.53% stake or 6.29 million shares in the Korean company for 55.1 billion won ($40.9 million) and delist the company.
The offer price of the share is 8,750 won apiece, the same as the one during the first round. It is 1.4% higher than Lock&Lock’s closing price on the main Kospi on May 14.
The PE house planned to buy a 30.33% stake in Lock&Lock through the first-round bid between April 18 and May 14. But it faced individual investors’ low demand for the offer price.
During the first-round bid, Affinity acquired a 15.8% stake in Lock&Lock, raising its ownership to 85.45%.
If the PE firm’s stake in Lock&Lock surpasses 95% through the second-round bid by June 5, it can delist the food container maker without the other shareholders’ consent under the law. Affinity is understood to delist the company and sell its stocks later, sources said.
Affinity acquired a 63.6% stake in Lock&Lock for 633 billion won in August 2017. The purchase price was 18,000 won apiece at the time.
The food storage maker’s stock has fallen amid competition with low-priced products from China. Lock&Lock posted a 21.1 billion won operating loss last year, marking the first deficit since 2006.
Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jihyun Kim edited this article.
