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[Alpha Biz=(Chicago) Reporter Kim Jisun] DB Inc, which serves as the holding company of DB Group, announced on the 28th that it bought a 5.63% (2.5 million shares) stake in DB HiTek, a foundry (semiconductor consignment production) company, for 165 billion won.
It bought shares from activist fund KCGI, which held a stake of about 7% in DB HiTek. DB Inc's stake has risen to 18 percent. DB said, "The purpose is to secure stable management rights and mid- to long-term investment returns."
KCGI has asked DB Group to strengthen its board-centered management and shareholder return policies. An industry official said, "The dispute between the DB Group and the activist fund is virtually over."
With the additional purchase of DB HiTek, DB Inc is likely to switch to a holding company. If the total assets of a particular company exceed KRW 500 billion and the subsidiary's stake value is more than 50% of its total assets, the company will be forcibly converted into a holding company after an investigation by the Fair Trade Commission. The forcibly converted holding company is required to hold a 30% or more stake in a listed subsidiary within two years.
On the same day, DB HiTek announced a plan to strengthen its shareholder return policy, which calls for maintaining the shareholder return ratio at 30 percent, including the purchase and retirement of treasury shares and dividends, and expanding the dividend propensity from the previous 10 percent to up to 20 percent.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
