The largest shareholder and second-largest shareholder of UNGEL will clash over management rights at next year's shareholders' meeting.
On the 24th, a financial investment industry source familiar with the circumstances of The One MTS, the second-largest shareholder of UNGEL, noted, "I understand that The One MTS plans to change the purpose of its holdings from simple investment to management participation as early as this week or no later than early next year," adding, "However, various entities are currently accumulating shares, and it likely hasn't set a timeline yet due to the rapid stock price increase preventing it from accumulating the desired volume."
The One MTS made a surprise entry as the second-largest shareholder by reporting a 6.27% equity stake in UNGEL on the 6th of last month. Although it stated the purpose of its holdings as simple investment, speculation arose among shareholders that it might be a move to gain management control. From September this year to the 23rd of this month, there was a significant net purchase by other corporate investors (2,146,187 shares worth 10.3 billion won), with a substantial portion of the net purchase presumed to be from The One MTS. During this period, foreign investors purchased 2.6 billion won worth, institutions bought 52.85 million won worth, and individuals made a net sale of shares worth 13.4 billion won.
In particular, from the end of November, affiliated companies of The One MTS also joined the full-scale buying offensive. Wiz & Company announced that it secured 198,147 shares (1.50%) from the 19th to the 25th of last month. The largest shareholder of Wiz & Company is Green Eco Solutions Co., Ltd., which is 100% owned by Mr. Kim, who also holds a 100% stake in The One MTS. Essentially, they are the same company. Combined, The One MTS secured a total equity rate of 7.78% (1,025,992 shares) as of the 26th of last month.
As there was also a net purchase of 3.1 billion won (567,876 shares) by other corporations in December, it is believed that The One MTS's equity share has increased even more when combining undisclosed shares.
There are opinions suggesting that The One MTS's share may exceed that of the largest shareholders. Currently, the largest shareholders of UNGEL, including Chairman Park Ji-hyang and CEO Yoo Ji-won, hold a total of 16.89%, but when excluding the UNGEL Employee Welfare Fund's equity (7.50%), it is about 9.39%. If The One MTS holds more than 1.62% (213,766 shares) based on the disclosed equity, it will possess more equity than the current management. Based on the closing price of 6,230 won on the 23rd, this amounts to 1.3 billion won.
UNGEL holds the top market share in the smart learning sector for infants, but after turning to a loss last year, it recorded an operating loss of 370 million won through the third quarter of this year. Cash and cash-equivalents have dramatically decreased from 9.5 billion won at the end of last year to 3.1 billion won by the third quarter of this year. Amid disappointing performance, with the equity ratio of the major shareholders now composing only about 10%, analysis suggests that The One MTS is moving to secure control.
Another financial investment source analyzed, "Recently, the attackers seem to be accumulating shares rapidly, disregarding the surge in stock prices," stating, "It appears they intend to engage in proxy battles at the regular shareholders' meeting in March next year." UNGEL's stock price was in the 3,000 won range until the second-largest shareholder appeared, but surged to 6,230 won the previous day.
UNGEL also responded by transferring its own shares to friendly forces. On the 18th of this month, UNGEL exchanged 237,769 of its own shares worth 1.2 billion won with 839,942 shares of EILUON, a mobile solution company, for a strategic partnership in new business collaboration. On the 20th of the same month, it transferred 170,000 of its own shares to the UNGEL Employee Welfare Fund for contributions. As of the 23rd, the equity ratio of the Employee Welfare Fund increased from 6.21% to 7.50%.
Own shares do not have voting rights, but when transferred to a third party, their voting rights are reinstated. Through two transactions of its own shares last week, UNGEL can additionally exercise voting rights worth 3.09% equity.
However, UNGEL has clarified that the disposal of its own shares is unrelated to securing voting rights. It also explained that the current second-largest shareholder possesses a stable equity stake that makes it difficult to exercise management rights. An UNGEL official noted, "Even if the second-largest shareholder bought shares with the aim of securing management rights, we currently have enough voting rights and equity, including friendly shares, making it unlikely to happen," adding, "Last week's two disposals of our own shares were unrelated to the company's effort to secure voting rights."