Hyundai Merchant falls as shareholders shun offering
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