[THE INVESTOR] Special purpose company Venus One has acquired just over one-fourth stake in Able C&C, a Korean cosmetics retailer that operates brands like Missha and A’Pieu. The consortium is now seeking to further acquire 60 percent stake to assume full managerial control.
Venus One is run by IMM Investment, a Korea-based private equity firm that has previously invested in firms such as Celltrion and Novelis Korea.
A Missha store in Ankara, Turkey.
Able C&C said in a regulatory filing on April 21 that founder Suh Young-pil, its largest shareholder, sold off 4.9 million shares worth 25.5 percent of his stake to affiliate Leaf & Vine, a firm that was later bought by Venus One. The selling price was 43,636 won per share, or 54 percent higher than the closing price on April 21, making the deal at 188.2 billion won.
“The 54 percent premium compares with the 29,000 won that was offered through open bids, and this means Suh has agreed to turn over managerial control,” one M&A expert told The Investor on the condition of anonymity.
Suh now holds 3.77 percent stake in the company.
On April 24, Leaf & Vine announced that it will bid to acquire up to a 60.21 percent stake in Able C&C for 29,500 won per share between April 24 and May 22. Once this happens, Leaf & Vine will hold an 87.27 percent stake.
“Through this open bid, we plan to strength our control over (Able C&C),” Leaf & Vine said in a regulatory filing with the Korean Exchange. “After the acquisition, we plan to improve its corporate competitiveness.”
Able C&C was established in 2000 and showed exponential growth until 2012. In 2005, the firm was listed on KOSDAQ, and transferred to KOSPI in 2011. The success was mainly anchored on Missha, which literally dominated the mid- to lower-tier markets. But the growing competition -- from Nature Republic, The Face Shop and TonyMoly -- affected its growth. After maintaining No.1 position for almost a decade, it was pushed to third place by LG Household & Health Care and Amorepacific.
The firm improved its earnings in 2016, with revenue and operating profit rising 7 percent and 37 percent on-year, respectively.
Bolstered by the takeover reports that led to foreign and institutional buying, Able C&C shares closed up 2.65 percent at 29,050 won on April 24, and remained unchanged the following day.
By Park Ga-young (firstname.lastname@example.org)