Japanese investor defends tender offer amid FSS scrutiny, says it never expected backlash over expression of interest
Japanese investment group Nexroc said Thursday it had notified JYP Entertainment of its planned takeover talks before publicly announcing a potential tender offer, pushing back against concerns raised by South Korea's financial watchdog.
"JYP was informed via email on October 21st about the upcoming negotiations," Nexroc told The Korea Herald.
"We did not expect such scrutiny from a simple expression of interest press announcement," the company said, adding that it had contacted both JYP and the Financial Supervisory Service earlier Thursday to clarify the situation.
The remarks come after the FSS described Nexroc's announcement as "very unusual" and warned investors of potential share-price volatility, citing the absence of a formal tender offer filing and uncertainty over the bidders' identities and financing.
On Monday, Nexroc and SVCV announced they were considering a tender offer for 25 to 50 percent of JYP's outstanding shares, potentially at a 30 percent premium to a reference share price. They identified Nov. 20 as a tentative launch date, although the final offer price and pricing method remain undecided.
The companies said they intended to submit a nonbinding acquisition proposal to JYP and negotiate for approximately 30 days before deciding whether to proceed with the tender offer.
However, the FSS also denied having been contacted by Nexroc following the announcement. JYP also reiterated its previous position that it had received no acquisition proposal from the Japanese investment group.
FSS said it was closely monitoring Nexroc and SVCV for possible unfair trading after the announcement triggered sharp movements in JYP shares.
The regulator warned that announcing a potential tender offer through a press release before submitting a formal filing made it difficult to verify the prospective bidders' identities and financial capacity. It also cautioned that the transaction might never materialize.
JYP shares jumped 14 percent in after-hours trading Monday and rose more than 6 percent Tuesday. The stock continued to fluctuate Wednesday, with an intraday trading range exceeding 4 percent.
Neither Nexroc nor SVCV has announced a final offer price or filed a formal tender offer statement.
ch0221@heraldcorp.com
