The takeover battle for Tong Yang Inc. took a dramatic turn Monday with its two largest stakeholders and former rivals for control of the building materials maker deciding to form a coalition against the current management ahead of a crucial shareholders meeting.

Eugene Corp., the country’s top ready-mix concrete-maker, and Pine Tree Investment & Management, an asset management company specializing in nonperforming loans, agreed to wield their voting power though a combined 20.04 percent stake in Tong Yang to appoint six new directors and raise the total number of directors to 16, local news reports said.


The decision came as current managing executives of Tong Yang move to defend their control over the firm and block the key shareholders’ plans on changing the number of directors.

Dismissal of a director requires an agreement of two-thirds of participating shareholders and one third of the total shareholders.

Currently, Pine Tree holds 10.03 percent stake in Tong Yang and Eugene, 10.1 percent.

A week earlier, Eugene’s CEO Jeong Jin-hak had said his company wanted to increase its stake in Tong Yang up to 25 percent to secure stable management control.

Eugene will enlarge its stake through purchase of shares held by other major shareholders, bloc deals and open market purchases, the company said.

Sampyo, another ready-mix concrete-maker, is the third largest shareholder of Tong Yang at 3.19 percent, and Tong Yang Leisure, the fourth with 3.03 percent. The rest is held by minority shareholders.

Tong Yang is scheduled to hold a shareholders meeting on Wednesday.

By Kim Yoon-mi

(yoonmi@heraldcorp.com)