E-Mart Inc., South Korea’s big-box store unit of Shinsegae Group, purchased shares owner family members held in three affiliates worth 34.3 billion won ($30.6 million) , a move that will allow the retailer unit to act as the parent over a number of others under Shinsegae umbrella and give enough ammunition to the founder family for any necessary reorganization to protect management.
E-Mart announced in a disclosure Tuesday that it bought 379,478 shares of Shinsegae Engineering & Construction Co. and 29,938 shares in Shinsegae Food Inc. owned by Shinsegae Group Chairwoman Lee Myung-hee, 40,000 shares in Shinsegae Information & Communication Inc. from honorary chairman Chung Jae-eun, as well as 74,170 shares of Shinsegae I&C and 31,896 shares of Shinsegae E&C from vice chairman and heir Chung Yong-jin in a block trade after the market closed. The combined shares were worth 34.3 billion won based on the closing prices of the shares on Tuesday.
As a result, E-Mart’s stock holding in Shinsegae I&C went up from 29.01 percent to 35.65 percent, Shinsegae E&C from 32.41 percent to 42.70 percent and Shinsegae Food from 46.10 percent to 46.87 percent. Lee, Chung Jae-eun and Yong-jin no longer own shares in the companies.
“The deal was aimed at solidifying E-Mart’s control over the three affiliates,” said E-Mart. It also gave Shinsegae owner family members cash ammunition for future reorganization such as holding transition.
Shinsegae Group is jointly run by the son and daughter - its department store unit Shinsegae led by president Chung Yoo-kyung and E-Mart by her brother Chung Yong-jin. The structure has been settled in since 2011 when Shinsegae spun off the retailer unit E-Mart and cemented in 2016 when the two siblings exchanged their shares in each unit.
Following the deal, Chung Yong-jin became the third largest shareholder of E-Mart with 9.83 percent stake, after the largest shareholder and mother Lee with 18.22 percent stake and second largest shareholder National Pension Service with 10 percent stake.
Shares of E-Mart fell 4.08 percent to close Wednesday at 235,000 won.
By Moon Il-ho and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]