Hyundai Mer­chant falls as share­hold­ers shun of­fer­ing

The Pak Banker - - Company& -

SINGAPORE: Hyundai Mer­chant Ma­rine Co. fell the most in al­most a month in Seoul trad­ing af­ter four of its biggest share­hold­ers re­jected the chance to buy shares in a rights of­fer­ing, damp­ing spec­u­la­tion about a takeover bat­tle.

Hyundai Heavy In­dus­tries Co. and unit Hyundai Samho Heavy In­dus­tries Co., which have a com­bined 25.5 per­cent stake in the ship­ping line, will sit out the sale, Kim Ki Young, a spokesman for Ul­san, South Korea-based Hyundai Heavy, said to­day by phone, with­out elab­o­ra­tion. Hyundai En­gi­neer­ing & Con­struc­tion Co. and KCC Corp. also said to­day that they would waive their rights.

The com­pa­nies' re­jec­tion may make it harder for bil­lion­aire Chung Mong Koo, the head of Hyundai Mo­tor Group, to chal­lenge sis­ter-in-law Hyun Jeong Eun for con­trol of Hyundai Mer­chant, the cor­ner­stone of her Hyundai Group. Hyun's grip has been en­dan­gered by Chung's ef­forts to buy a stake in con­struc­tion com­pany Hyundai En­gi­neer­ing, the owner of 8.3 per­cent of the ship­ping line.

"The Hyundai broth­ers may have wanted to avoid giv­ing the im­pres­sion that they were sin­gle­mind­edly try­ing to take over not only the builder, but also Hyundai Mer­chant," said Lee Sokje, an an­a­lyst at Mi­rae As­set Se­cu­ri­ties Co. in Seoul. "But it's still too early to say if this is the end of the fight." Hyundai Mer­chant dropped 5.7 per­cent to 37,150 won at the close of trad­ing in Seoul. Hyundai Heavy, the world's biggest ship­builder, ad­vanced 3.8 per­cent to 456,500 won. Hyundai En­gi­neer­ing rose 1.7 per­cent to 71,600 won.

No one was im­me­di­ately avail­able for com­ment at Hyundai Mer­chant's press of­fice. The ship­ping line said in an Oct. 28 state­ment that it will de­cide what to do with shares re­jected in the rights of­fer­ing af­ter dis­cus­sions with the ar­rangers.

Hyundai Mer­chant of­fered new com­mon shares at 32,000 won apiece. Hyundai Heavy and Hyundai Samho, the sec­ond and fourth-biggest share­hold­ers in the Seoul-based ship­ping line, had the chance to buy a com­bined 10.2 mil­lion. Chung's younger brother Chung Mong Joon is the biggest share­holder in Hyundai Heavy. The ship­builders also own pre­ferred stock in the ship­ping line. Hyundai En­gi­neer­ing, the third-biggest share­holder in Hyundai Mer­chant, didn't say why it wasn't buy­ing the new shares in its state­ment to­day. The builder has an 8.3 per­cent stake in Hyundai Mer­chant, in­clud­ing pre­ferred shares.

KCC, set up by Chung's un­cle and the owner of 4.3 per­cent of Hyundai Mer­chant, said to­day it wouldn't take part in the rights of­fer­ing as it's fo­cus­ing in­vest­ments on mak­ing ma­te­ri­als for so­lar cells.

Hyundai El­e­va­tor Co., con­trolled by Hyun and the biggest share­holder in Hyundai Mer­chant, said yes­ter­day that it will buy 1.82 mil­lion new shares in the ship­ping line.

Share­hold­ers sell­ing 35 per­cent of the Hyundai En­gi­neer­ing said this week that they may be­gin talks with Chung's Hyundai Mo­tor Group af­ter end­ing ne­go­ti­a­tions with Hyun's Hyundai Group. The two groups made ri­val of­fer for the stake ex­tend­ing a decade-long fam­ily feud

In a sep­a­rate news item, Toy­ota Mo­tor Corp., say­ing it reached an out-of-court set­tle­ment with the fam­ily of a Cal­i­for­nia High­way Pa­trol of­fi­cer who to­gether with three oth­ers died when their car sped out of con­trol and crashed, said it was dis­ap­pointed that the amount of the set­tle­ment was made pub­lic.

Toy­ota, based in Toy­ota City, Ja­pan, agreed to set­tle with the fam­ily for $10 mil­lion, said Larry Wil­lis, an at­tor­ney for Bob Baker Lexus, the San Diego car deal­er­ship that loaned the Lexus ES350 to Mark Say­lor and isn't part of the set­tle­ment.

A court or­der bar­ring the par­ties in­volved from dis­cussing the set­tle­ment terms, which must be ap­proved by a state court judge in Los An­ge­les, ex­pired yes­ter­day.

"These par­ties agreed to keep the amount con­fi­den­tial, in part to pro­tect the fam­i­lies from un­wanted so­lic­i­ta­tions and to al­low them to move on from this dif­fi­cult pe­riod," the Toy­ota City, Ja­pan-based au­tomaker said to­day in an e-mailed state­ment. "Mr. Baker now wants the amount pub­li­cized in an ap­par­ent ef­fort to shift the fo­cus away from his deal­er­ship as he con­tin­ues to lit­i­gate this case with the fam­i­lies."

Toy­ota is­sued the state­ment af­ter the Los An­ge­les Times re­ported the set­tle­ment amount ear­lier to­day.

Toy­ota lost a bid on Dec. 10 in fed­eral court in Santa Ana, Cal­i­for­nia, to dis­miss law­suits claim­ing per­sonal in­juries or deaths were caused by in­ci­dents of sud­den ac­cel­er­a­tion.

The au­tomaker is ac­cused in the law­suits of fail­ing to dis­close or warn of a de­fect in its ve­hi­cles that could cause sud­den ac­cel­er­a­tion. Toy­ota said in court fil­ings that the plain­tiffs didn't of­fer spe­cific al­le­ga­tions of an ac­tual de­fect and that the com­pany didn't con­ceal any­thing. Toy­ota faces about 400 law­suits al­leg­ing lost ve­hi­cle value or in­jury or death from sud­den ac­cel­er­a­tion. Say­lor, 45, his wife, their 13-year-old daugh­ter and his brother-in-law died Aug. 28, 2009, when the Lexus they had on loan while his car was be­ing ser­viced at the dealer crashed. -Bloomberg

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