It has been revealed that UANGEL, a software company listed on the KOSDAQ, reached a tag-along agreement with its second-largest shareholder, The One MTS, two days before its regular shareholder meeting last month, after having engaged in a management rights dispute since earlier this year. If UANGEL sells its management rights and shares to a third party in the future, The One MTS will also be able to participate in the related negotiations. The management rights dispute has effectively been concluded.
According to the financial investment industry on the 14th, UANGEL held a board meeting on the 26th of last month, where it approved a shareholder proposal agreement to guarantee The One MTS's tag-along under conditions that would not cause management rights disputes, such as demands for the appointment of directors and auditors. Tag-along refers to the right of minority shareholders to demand that when a controlling shareholder sells their equity, other shareholders sell at the same price.
On the same day, Park Ji-hyang, the chairperson of UANGEL, and Yu Ji-won, the CEO, along with other affiliated parties, also drafted a shareholder agreement containing details related to the stock transfer and tag-along with The One MTS. In the event that the largest shareholder sells their equity to a third party, The One MTS can also sell its shares under the same conditions. If this is violated, the largest shareholder must pay a penalty of 6 billion won to The One MTS. Instead, all voting rights of The One MTS will be delegated to UANGEL.
With this agreement, UANGEL has stabilized its management rights and eliminated risks related to disputes such as lawsuits, while The One MTS can enjoy exit opportunities and a management rights premium. A spokesperson for The One MTS noted, "As the second-largest shareholder, we wanted to end unnecessary attrition by cooperating rather than taking over the company's management rights forcefully."
Previously, The One MTS declared its participation in management by changing its purpose for holding a 9.91% equity stake from "simple investment" to "influence over management" on February 9 of this year. It also proposed the appointment of new directors and auditors and a cash dividend of 200 won per common share, and on the 21st of last month, it sent an open letter requesting minority shareholders to delegate their voting rights to the shareholder advocacy platform 'Act.' Currently, UANGEL's largest shareholders, including Chairperson Park Ji-hyang and CEO Yu Ji-won, own 17.07% of the shares, including a 7.50% stake through UANGEL's internal welfare fund.
Contrary to the initially expected showdown, all agenda items at UANGEL's regular shareholders' meeting held on the 28th of last month passed with an average approval rate of 96.5%, seemingly due to the shareholder agreement reached two days prior. UANGEL announced plans to burn 500,000 of its shares at The One MTS's request, and the proposals for appointing internal and external directors put forward by the management were also approved. The cash dividend proposal of 200 won per share presented by the shareholders was adjusted to 70 won after coordination with the management's proposal of 40 won per share.
Some have suggested that the recent tag-along agreement could allow UANGEL to sell its management rights to other corporations with business relevance. UANGEL is the market leader in the domestic smart learning market targeted at infants.
In response, UANGEL emphasized that there is no intention to sell its management rights. A UANGEL representative stated, "In principle, if there are such matters (management rights or equity sales), we would consult with the second-largest shareholder prior to taking action," adding, "Although there have been several related proposals in the past, UANGEL currently has no intention and will not have any intention of proceeding with the sale of management rights."