South Korea advances takeover-disclosure rules as ruling party pushes Korean-style bear hug

  • Financial Services Commission selected Kim & Chang to study acquisition-proposal disclosure guidelines.
  • Democratic Party plans Capital Markets Act amendment requiring qualifying control-premium proposals disclosed to shareholders.
  • UK rules include 28-day PUSU deadline; Japan emphasizes board review, shareholder interests and transparency.

South Korea’s Financial Services Commission is developing disclosure guidelines for corporate acquisition proposals, while the ruling Democratic Party of Korea is pursuing a Korean-style bear hug rule that would require certain listed companies to disclose takeover approaches. The commission recently selected Kim & Chang Law Firm as an advisory firm to examine domestic standards and overseas systems, including when proposals must be disclosed, what information should be provided, and whether responsibility rests with acquirers or target-company boards. The review aims to reduce information asymmetry during hostile mergers and acquisitions and help general shareholders assess transaction terms and rationale. The Democratic Party’s plan, for which Representative Oh Ki-hyung, chairman of the party’s Capital Market Special Committee, is reportedly planning a Capital Markets Act amendment, is expected to cover proposals containing a control premium under specified conditions. One option previously under consideration would apply to companies trading below 0.5 times book value. The commission is also examining board duties to review and explain proposals. The UK uses the Takeover Code and a 28-day PUSU rule, while Japan emphasizes corporate value, shareholder common interests, shareholder intent and transparency. The party and commission are separately pursuing a mandatory tender offer rule, while businesses support greater transparency but say defensive tools such as poison pills and dual-class shares should be strengthened first.

The information on this website is generated using AI and we cannot guarantee its accuracy. Please use it as reference information only.