No sooner had Hyundai’s management accepted the share price demands of the American International Group/W.L. Ross investors to acquire Hyundai Securities, and two other financial subsidiaries (See IJ Website Sept. 10), than the country’s feisty labor unions attacked the deal as being unfair.
They were joined by the People’s Solidarity for Participatory Democracy (PSPD), a civic group, which defends minority shareholders’ rights. The protestors have said they intend to call a special meeting of Hyundai’s shareholders, and will also try to block the deal in court.
According to a report from Reuters News Agency, Union leaders and the PSPD feel that the terms of deal, which provides that the AIG group will acquire a 35 percent controlling interest in Hyundai and control of the two financial trusts for a total investment of around $855, doesn’t fairly reflect the true value of the companies and is unfair to its present shareholders.
While Hyundai Securities has been trading in the $6.00 to $6.30 range, the AIG Group’s purchase is set at $5.44. In fact the deal can only be officially approved when the shares fall below $6.00, as Korean law prohibits issuing a new class of shares to non-shareholders at more than a 10 percent discount off the price of existing common shares.
AIG hasn’t as yet commented on this new development.