Minority shareholders have expressed strong opposition to Woori Financial Group's plan to fully integrate Dongyang Life as a subsidiary. While the company stated that the comprehensive stock exchange ratio was calculated according to legal standards and confirmed by external accounting firms, shareholders argued that the issue lies not in legal formulas but in practical fairness. They raised concerns about the exchange ratio, the price for stock buyback rights, and the timing of share buybacks.
On June 22, Woori Financial and Dongyang Life held a shareholder meeting to explain the background of the stock exchange initiative, the basis for the exchange ratio, and measures for shareholder protection. This meeting was organized in response to a request from financial authorities for a revised report and aimed to gather direct feedback from minority shareholders.
Woori Financial plans to acquire Dongyang Life shares in exchange for Woori Financial Group shares, with an exchange ratio of 0.2521056 shares of Woori Financial Group for each Dongyang Life share.
During the meeting, shareholders voiced specific grievances. One attendee stated, “It’s not about following the law; it’s about ensuring fairness,” questioning the difference between the price Woori Financial paid to acquire Dongyang Life shares from its major shareholder and the current exchange price. They emphasized the need for protection of minority shareholders, especially considering the potential for delisting.
The price of 8,505 won for stock buyback rights also became a point of contention. One shareholder expressed reluctance to hold Woori Financial Group shares, indicating a preference for a public buyout instead.
Disagreements also arose regarding the timing of share buybacks. The company explained that reducing the number of newly issued shares from Woori Financial Group was a measure to prevent dilution. However, shareholders countered that the benefits of the buyback were not reflected in the exchange ratio, leaving minority shareholders at a disadvantage.
Dongyang Life reiterated the appropriateness of the exchange ratio based on reviews from accounting firms Samil and Anjin, asserting that the confirmed exchange ratio falls within a reasonable range. While the company attempted to clarify the methods for calculating stock buyback rights and the rationale behind share buybacks, it did not provide alternative solutions regarding the shareholders' demands for price reassessment or increased cash compensation.
As a result, the controversy over price fairness is likely to continue into next month’s shareholder meeting and the process of exercising stock buyback rights. Dongyang Life plans to incorporate the inquiries raised during the meeting and additional verification results into its revised report and key issue reports.
* This article has been translated by AI.
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