The 'put option (the right to sell shares at a specific price) dispute' between Kyobo Life Insurance and the financial investor (FI) Affinity Consortium is highly likely to conclude after 7 years. Global private equity firm Affinity Equity Partners and the Government of Singapore Investment Corporation (GIC), part of the consortium formed for the acquisition of Kyobo Life Insurance equity, sold their respective stakes of 9.05% and 4.5% on the 7th to Shinhan Investment Corp. The transaction price is reported to be 23,400 won per share, lower than the initial investment price of 245,000 won per share.
With 2 of the 4 funds in the consortium withdrawing funds (exiting), the consortium is expected to proceed with the disbandment process. IMM Private Equity (IMM PE) and EQT Partners, each holding a 5.23% equity stake in Kyobo Life Insurance, are also expected to enter negotiations for stake sales. Kyobo Life Insurance stated that the likelihood of completely concluding the put option dispute that has continued for 7 years has increased.
Earlier, the consortium (Affinity, GIC, EQT, IMM PE) acquired 24% (4.92 million shares) of Kyobo Life Insurance in September 2012 for 1.2054 trillion won (245,000 won per share). The contract included a clause stating that if Kyobo Life Insurance's initial public offering (IPO) fell through by September 2015, "Affinity could exercise the put option at the higher amount between the fair market value (FMV) of the shares and the purchase price," with the agreement mentioned.
After Affinity's put option was exercised, having chosen Deloitte Anjin as the valuation agency, they set Kyobo Life Insurance's share value at 410,000 won. In contrast, Chairman Shin’s side claimed the share value was below 200,000 won, asserting that the basis for this was the share price of 198,000 won at which they bought back 2% of their shares last August from entities like Goldman Sachs.
Although it was anticipated that the large difference in claimed prices would make negotiations difficult, the put option dispute came to a conclusion as an agreement was ultimately reached. Affinity noted that "through discussions and consultations, a direction was found that could achieve a 'win-win' for all stakeholders." Jo Dae-kyu, the representative of Kyobo Life Insurance, said, "Kyobo Life Insurance will be able to focus more on the transition to a holding company and future-oriented challenges," expressing hope to maintain a friendly relationship with Affinity for collaboration in future opportunities.