South Korean biopharmaceutical drugmaker Genexine and gene-editing company ToolGen said Aug. 20 in respective regulatory filings that they had dropped plans for a 1:1.2 merger to create ToolGenexine due to shareholder opposition.
The total value of stakes held by dissenting shareholders from both companies exceeded the minimum mark as agreed in a contract in June -- 130 billion won ($107.6 million) for Genexine and 50 billion won for ToolGen -- the companies said.
Dissenters exercised the appraisal right -- the right to veto a merger plan by receiving cash payments for the fair value of their shares.
Market watchers said the dissenters were likely to exercise their appraisal rights, as the lukewarm stock performance of both companies put the share price lower than the appraised fair value.
For shareholders, the appraisal rights could be executed in exchange for 67,325 won per Genexine share and 80,695 won per ToolGen share.
Trading on the tech-heavy Kosdaq, Genexine closed at 52,500 won per share on Aug. 19. ToolGen, trading on third-tier market Konex, closed at 53,500 won per share.
The news triggered a plunge in ToolGen share prices, with stocks falling 6.2 percent on Aug. 20. Genexine’s share price edged up 0.8 percent.
The two companies vowed to continue cooperation with one another despite the bungled deal.
By Son Ji-hyoung (email@example.com)