Affinity Equity Partners, which holds a 69.64% stake in South Korean food container manufacturer Lock & Lock, is slated to buy most of the remaining shares to fully control the management as the household product maker’s earnings have declined amid fierce competition with low-cost goods from China.
The Asian buyout firm will conduct a tender offer to buy a 30.33% stake, or 13.1 million common shares in Lock & Lock for 114.9 billion won ($83.6 million) between April 18 and May 14, according to its regulatory filing on Thursday. Seoul-based NH Investment & Securities Co. will act as the lead manager.
The tender offer is priced at 8,750 won per share, with a 6.9% premium to Wednesday’s closing price of 8,180 won on the main Kospi. The offering price also represents a 22.7% premium to 7,132 won, the weighted average share price for one month prior to April 18.
Affinity plans to delist Lock & Lock after it successfully completes the tender offer. If the largest shareholder owns more than a 95% stake in a company, the investor can delist all shares without consent of the minority stakeholders under the law.
Affinity acquired a 63.6% stake in Lock & Lock for 633 billion won in August 2017. The purchase price was 18,000 won apiece.
The Korean food storage maker’s stock has declined due to rapid growth of Chinese rivals. Lock & Lock’s revenue on the consolidated basis dropped 7% on-year to 484.6 billion won in 2023, the lowest sales since 2020.
The company posted a 21.1 billion won operating loss last year, marking the first deficit since 2006. The stock price is less than half of its acquisition price in 2017.
Lock & Lock shares closed up 11.6% on Wednesday, with trading volume skyrocketing more than 10 times to 1.27 million shares as information on the tender offer was leaked to the market.
The share price rose 6.23% to 8,690 won on Thursday morning.
Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.
