As the deadline approaches for the equity tender offer for A+ Asset disclosed by activist fund Align Partners Asset Management, attention is focusing on A+ Asset's response strategy. A+ Asset is one of the few corporations in the corporate insurance agency (GA, a company that sells products from various insurers) industry to be listed, but criticism has continued that its share price is low. Some speculate that A+ Asset is not supporting the share price to facilitate Chairperson Gwak Geun-ho's succession process.
Align Partners, which holds 4.99% equity in A+ Asset, disclosed on the 18th that it will conduct a tender offer through the 7th of next month to buy 4,501,192 shares (19.9%) of A+ Asset at 8,000 won per share. If the tender offer succeeds, the equity ratio will be 24.89%. As of the 26th of this month, the equity ratio of Chairperson Gwak and related parties is 30.33%.
Align Partners explained the reason for the tender offer by saying it wants to become a major shareholder because it positively assesses A+ Asset's long-term potential. In 2022, Align Partners also bought 14% equity in JB Financial Group and took part in decision-making by urging the company to spend more than 50% of net profit on dividends and share buybacks.
Align Partners appears to have judged that A+ Asset's share price is undervalued as GAs gain influence in the insurance market. As of the end of June, A+ Asset had 6,908 planners, ranking seventh among all GAs. As of the end of last year, there were a total of 74 large GAs with at least 500 planners.
Among large GAs, the listed companies are A+ Asset and Incar Financial Service. As of the end of last year, A+ Asset's asset size was 479.3 billion won, and Incar Financial Service's was 707.4 billion won. As of the close on the 28th, the price-to-book ratio (PBR) was 1.16 times for A+ Asset and 4.31 times for Incar Financial Service. Incar Financial Service's assets are about 1.5 times those of A+ Asset, but the PBR differs by more than threefold.
A+ Asset is reportedly meeting with domestic securities firms to respond to Align Partners' tender offer. Chairperson Gwak also bought 30,904 shares on the market from the 21st to the 26th.
For Chairperson Gwak's side to launch a counter tender offer, it must be announced before Align Partners' tender offer deadline (Dec. 7). However, since the closing price on the 28th (8,270 won) is higher than Align Partners' tender offer price (8,000 won), if the current share price holds, Align Partners' tender offer will fail, and no separate response would be necessary. An A+ Asset official said, "We are monitoring the current situation and considering our response direction."
According to the Financial Supervisory Service, in the first half of this year the commission income of large GAs (8.9579 trillion won) rose 22.9% from the same period last year. As of the end of last year, the number of planners affiliated with GAs was 288,446, more than 100,000 higher than exclusive planners at insurers (184,468), drawing increased attention from the capital market to GAs.