Possible Reduced Cost for HYBE to Acquire Min Hee-jin’s Shares

According to an article published by Korea Economic Daily on May 1st, the shareholders’ agreement for ADOR states that HYBE holds the right to acquire all shares owned by CEO Min and other individuals, either directly or through a designated third party, in the event of a contract breach. The specified purchase price for each share in the call option target is the lower of its par value or 70% of its fair value.

In a typical scenario, HYBE would have been required to buy shares from CEO Min at a price close to 100 billion won, as per the terms of their put option agreement. However, if the company is found to have committed a “breach of trust,”HYBE may only need to purchase the shares at their par value based on the shareholders’ agreement. This would result in a significantly lower purchase cost of approximately 2.8 billion won for CEO Min’s shares and a total of 3.2 billion won including management shares. In this scenario, CEO Min, who had borrowed 2 billion won to acquire 18% of the shares, could potentially end up with no profit from the sale to HYBE.

In reply, HYBE informed News1 that they have no intention of addressing efforts to minimize the unlawful takeover as a dispute over compensation or a vengeful scheme. They argued that the opposition, led by ADOR CEO Min Hee-jin, had carefully orchestrated the illegal takeover. HYBE urged CEO Min to collaborate with the ongoing investigation by the authorities and await the verdict of the court, citing that a legal review had already been conducted, confirming substantial evidence of breach of trust and uncovering other illegal actions as well.

After reporting that ADOR CEO Min Hee-jin and Vice-CEO A attempted a takeover on April 22nd, HYBE initiated an emergency audit. On April 25th, they filed a report to the Seoul Yongsan Police Station, accusing CEO Min and A of breach of trust. However, during a press conference on April 25th, CEO Min denied the suspicion of breach of trust and claimed that the messenger captures publicly released by HYBE had been manipulated. She stated that she had never planned, intended, or executed any takeover and that as an employee and CEO, she had no motive for breach of trust.

Additionally, on April 22nd, HYBE demanded a board of directors meeting to replace the management of ADOR, including CEO Min, following the attempted takeover. However, when CEO Min’s side rejected the demand, HYBE filed for an interim shareholders’ meeting with the court on April 25th. Despite CEO Min’s side requesting a change in the trial date due to time limitations, it was denied and the trial proceeded as planned on April 30th. Both parties chose not to make any additional statements, emphasizing their desire for the case to be handled in accordance with legal procedures.

The original source for this information can be found at the following link: //news.nate.com/view/20240501n09024?mid=n1008.