Dong Sung Bio Pharm, which is undergoing a rehabilitation process, has selected United Asset Management (UAMCO) as the stalking-horse bidder. The company plans to select a final acquirer soon through an open bidding process.
According to the investment banking (IB) industry on the 12th, Dong Sung Bio Pharm signed a conditional investment agreement with UAMCO on the 7th. Deloitte Anjin LLC was appointed as the sell-side adviser. The company will receive letters of intent (LOIs) by the 5th of next month, conduct due diligence, and hold the main bid on the 19th.
The pre-approval merger and acquisition (M&A) of Dong Sung Bio Pharm's rehabilitation plan is proceeding through a Stalking Horse Bid. A stalking horse signs a conditional investment agreement with a bidder that has expressed interest and designates it as the preliminary acquirer, then selects the final acquirer through an open bidding process. If there are no bidders in the open bidding process or no party offers better terms than the preliminary acquirer, the preliminary acquirer becomes the final acquirer.
Once the final acquirer of Dong Sung Bio Pharm is selected, the court will convene a meeting of interested parties and hold a vote on the rehabilitation plan. The rehabilitation plan will include a repayment plan for secured rehabilitation claims and rehabilitation claims, with the sale proceeds serving as the repayment source.
Dong Sung Bio Pharm is currently in a management control dispute. It escalated when former Chair Lee Yang-gu sold a 14.12% equity stake to the marketing specialist Brand Refactoring in April. Following Lee's stake sale, Brand Refactoring became the largest shareholder of Dong Sung Bio Pharm. CEO Na Won-gyun argued that Lee violated an agreement to forgo voting rights and a share transfer restriction contract, while Brand Refactoring countered that it would replace management at the shareholders meeting.
Afterward, on May 7, Dong Sung Bio Pharm filed for a rehabilitation process with the court. The company said it was an unavoidable measure to overcome a liquidity crisis, not to defend management control. Dong Sung Bio Pharm swung to a loss last year, posting an operating loss of 6.5 billion won, and revenue was 88.4 billion won, a decline from the previous year (88.5 billion won). The current ratio, which indicates cash mobilization capacity, fell below 100% last year to 88%.