KT&G rejected an offer by Flashlight Capital Services (FCP) to purchase its ginseng business, reports Business Korea.
On Nov. 8, KT&G sent a response to FCP’s letter of intent. “We will do our best to foster the three core businesses, including health functional foods,” it stated.
“Last year, we announced a mid-to-long-term growth strategy to foster health functional foods along with overseas cigarettes and NGP [next-generation products] as our three core businesses, and we will do our best to achieve these goals,” a KT&G official emphasized.
On Oct. 14, KT&G also issued a statement dismissing FCP’s acquisition proposal, stating, “FCP’s acquisition proposal was unilaterally disclosed without any discussion with us.”
In its letter of intent, FCP offered to acquire all KGC’s shares for nearly KRW2 trillion ($1.47 billion), which represents a 50 percent premium over the enterprise value mentioned by some analysts during KT&G’s 2023 investor day.
Industry insiders believe the likelihood of the transaction being completed is low, given KT&G’s shareholding structure.