ISU PETASYS, a printed circuit board (PCB) corporation, has abandoned its acquisition of JEIO, a manufacturer of carbon nanotubes (CNT), leading to diverging stock prices for both companies. ISU PETASYS claimed that JEIO did not fulfill the obligations of the stock purchase agreement (SPA), while JEIO countered that ISU PETASYS unilaterally notified them of the termination.
Shares of JEIO traded at 13,700 won on the Korea Securities Dealers Automated Quotations (KOSDAQ) market at 9:43 a.m. on the 24th. This was a decrease of 1.65% (230 won) from the previous day. At the same time, ISU PETASYS's stock price rose by 25.51% (8,150 won), reaching 40,100 won.
This appears to be the impact of ISU PETASYS's announcement made after the market closed the previous day regarding the withdrawal of its acquisition of JEIO. ISU PETASYS stated, "Due to the seller's breach of obligations under the SPA, grounds for termination of the contract have arisen, and we notified the sellers of the contract's termination."
In abandoning the acquisition of JEIO, ISU PETASYS decided to reduce the scale of its planned capital increase from 550 billion won to 250 billion won, and all of the 250 billion won will be used for facility expansion.
JEIO claimed that ISU PETASYS issued an announcement of unilateral contract termination. Currently, JEIO stated that they view ISU PETASYS as having breached the contract under the SPA, and they plan to consider not only penalties for breach but also claims for damages.
Kang Deuk-joo, the representative of JEIO, noted that they aim to resolve uncertainties as quickly as possible. In a statement, he said, "While we have not received a direct request for contract termination from ISU PETASYS, the trust has been broken by the other party, making it difficult to proceed with the planned change of the largest shareholder."
He added, "We have been diligent in completing the transaction, as we have notified about holding an extraordinary shareholders’ meeting for entering the board of directors of ISU PETASYS," and he mentioned, "Currently, the likelihood of finalizing the transaction is uncertain due to the other party's unilateral and unreliable attitude."
The representative, Kang, also stated, "I believe it is right to articulate the company's direction based on swift decision-making rather than continuing to create uncertainties for shareholders and employees," and promised, "We will minimize confusion through prompt decision-making."