Ahn Byung-doo, who led Shinsung ST, a Kosdaq-listed company, is set to acquire the largest shareholder's equity in Manho Rope & Wire, which is listed on the main bourse. As a result, Manho Rope & Wire's owner management will come to an end in the third generation. While some say the decision is unusual given Manho Rope & Wire's long-running management control dispute, there is anticipation inside and outside the company for the emergence of a new largest shareholder.
Manho Rope & Wire said it recently signed a contract to transfer 24.82% of the company's equity held by the largest shareholder, including CEO Kim Sang-hwan, and related parties to CEO Ahn Byung-doo. Under the deal signed on the 1st, Ahn agreed to acquire about 1.03 million shares of Manho Rope & Wire for about 62.6 billion won. The acquisition price per share is 60,798 won, indicating he recognized a considerable management control premium in acquiring the equity when considering this year's Manho Rope & Wire share price movement (21,950–47,900 won) up to the contract date.
On the contract date, a 10 billion won deposit was paid, with a 10 billion won interim payment due in December and the remaining 42.6 billion won to be paid on Feb. 14 next year, after which the shares are to be delivered. Once the shares are delivered, Ahn Byung-doo will become the sole largest shareholder.
Manho Rope & Wire was founded in 1953 in Yeongdo District, Busan, under the name Donga Steel by the late President Kim Hyun-tae. After listing on the Korea Exchange in 1977, the company has been led by CEO Kim Sang-hwan following former Chairman Kim Young-kyu, the second-generation owner.
Although it was a strong small-to-mid-sized company producing steel and textile products, the business went through ups and downs, performance deteriorated, and the company faced a management control dispute over the past few years. MK Asset, which had long expanded its Manho Rope & Wire equity for simple investment purposes, increased its equity further in 2023 to become the second-largest shareholder, and CEO Kim Sang-hwan and other owner family members moved to defend management control by purchasing additional equity and using treasury shares.
The second-largest shareholder MK Asset currently holds 23.62% equity, not far behind the largest shareholder (24.82%). Aggressively expanding its equity, MK Asset has continued its management control dispute with the company, even at the risk of litigation. Led by professional investor Bae Man-jo, known as a "super ant," MK Asset gained prominence by concentrating investments in so-called "locked-up stocks" with low free floats.
In this situation, industry watchers expressed puzzlement when Ahn Byung-doo suddenly moved to acquire all of the largest shareholder's equity. On this, Ahn said, "It is still an ongoing contract, so I must be cautious," but noted, "The gap in equity between the largest and the second-largest shareholders is in fact quite substantial." This is interpreted to mean he judged that the ongoing management control dispute would not actually affect control, and thus acquired control and equity.
In fact, the company holds substantial friendly equity. The company's treasury shares account for 18.04%, and in December, it secured a white knight by transferring 9.90% of its treasury shares to partner Hankuk Steel Wire. Hana UBS Asset Management, a financial investor, holds 11.99% of the company's stock through a fund, which is also considered friendly equity to the company, and the employee stock ownership association holds 4.58%.
Inside and outside the company, there is considerable expectation for Ahn Byung-doo's acquisition. Although he has stepped back from the front lines of management, Ahn is an executive who founded Shinsung ST (formerly Doosung Techwin), grew it, and listed it on the Kosdaq market. After the global financial crisis hit hard, Ahn sold Shinsung ST to Shinsung Deltatech, but he continued to lead the company as a professional manager while maintaining a significant equity stake.
Shinsung ST, which makes battery components for electric vehicles and energy storage systems (ESS), has grown into a profitable small-to-mid-sized company in Changwon. It listed on the Kosdaq market in 2023, and even as downstream demand in the secondary battery market slowed last year and low-priced Chinese products poured in, operating profit increased.
In particular, given that Manho Rope & Wire suffered a major ordeal due to an accounting fraud scandal, analysts say the change in the largest shareholder could be a significant turning point for the company. An industry official said, "The biggest opportunity for a company found to have accounting fraud to self-correct is a change in the largest shareholder," adding, "If the change in the largest shareholder leads to corrections of past window-dressing, the core business can get back on track."