Invest1 publisher2 min readPublished
Korea's tender-offer bill would make a 30% control buyer bid for 20 more points
Korean lawmakers on a National Assembly committee backed a bill on Sept. 17 making any new 25% largest holder of a listed company bid for shares up to 50% plus one. In a 30% block sale that means buying about 20 more points, and the block's seller may end up paying for them.
The Investor · Invest desk
What happened
- A National Assembly committee in Korea approved a Capital Markets Act bill on Sept. 17, 2026 that reinstates mandatory tender offers built on 25% and 50%-plus-one-share thresholds.
- The duty applies in principle when a buyer, with related parties, becomes a listed company's largest shareholder at 25% or more of the voting shares.
- When a largest shareholder sells a 30% block and hands over control, holders of the other 70% are not parties to the sale and get no automatic chance to sell.
- Korea first imposed the rule in 1997 and abolished it a year later, amid concerns it raised acquisition costs and slowed post-crisis restructuring.
- The EU Takeover Directive and Britain's rule give all shareholders the chance to sell all their shares at a fair price once control changes.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost Financing a Korean control deal gets heavier: in the 30% example the buyer ends up owning 50 points, about 1.67 times the stock it agreed to buy.
- constraint Minority holders gain a partial exit only, so most of their stock stays under the new controller after the tender closes.
- decision Buyers gain a reason to size control blocks at or above 50% plus one share, since a threshold that counts shares already held appears to leave such a block nothing to tender.
In the 30% block sale, the line a buyer must reach is 50% plus one share [8]. As in 1997, shares the buyer already holds count toward that line [7][12]. The tender therefore covers about 20 more percentage points of the company [1]. Minority holders own the other 70 points [2]. If every one of them tenders and the offer is filled evenly, each can sell roughly 29% of its shares and keeps the rest [2].
A merger that moved control the same way would have needed a special resolution at a shareholders' meeting, and qualifying dissenters would have had appraisal rights [10]. The tender is a smaller remedy than either. The European model would take the buyer to 100 points of stock, 3.33 times the block it agreed to buy [4]. Korea's cap spares the buyer the other 50 points [4]. According to the Seoul Economic Daily account, the design sits between protecting minority holders and keeping acquisitions workable, because the wider the purchase requirement, the more money the acquirer has to raise [11].
The published account breaks off before the bill's pricing rule, so the tender price here is an assumption. The 1997 rule was meant to give retail investors a chance to share in the control premium [4]. Suppose the revived tender has to match what the block seller received. Then either the buyer or the seller pays for the extra 20 points. The buyer can pay the premium on them and accept that some deals stop making sense, the cost worry that ended the 1997 version [5]. Or the buyer can hold its total budget for control fixed and cut the price it offers for the block. In that case the controlling shareholder funds the minority exit out of its own premium.
I think the second outcome describes most deals. A buyer's price for control depends on what control is worth to it, and the bill does not change that figure; it changes how many shareholders split it. The counter-case is that the extra 20 points are shares with earnings attached (they are not dead money), and a buyer who values them at the tender price gives up financing capacity and nothing else. If block premiums in Korean control sales hold near current levels once the rule is in force, the buyers are paying and this view is wrong.
What to watch
- The bill's pricing rule: whether the tender must match the price the block seller received.
- A plenary vote in the National Assembly and the date the rule takes effect.
- Any exemption for restructuring or distressed sales, the deal type whose cost concerns ended the 1997 version.