Eugene declares takeover bid for Tongyang

Eugene Corp., the country’s largest ready-mixed concrete maker, declared Tuesday a takeover bid for its smaller rival Tongyang, saying it will raise its stake in the target through open-market purchases.

“Eugene will continue share purchases until it secures control of Tongyang’s management,” the firm said in a filing after the stock market closed Tuesday. 

Eugene is currently Tongyang’s second largest shareholder, with a 9.29 percent stake. Pinetree Asset Management is the largest stakeholder and Eugene’s apparent contender in the takeover bid, controlling 9.73 percent of the total outstanding shares. Another Remicon maker Sampyo is third, with 3.19 percent.

Shares in Tongyang rose 2 percent to 3,245 won ($2.72) on the main KOSPI stock exchange Wednesday.

Tongyang, which in February graduated from a 28-month court receivership, sits on cash piles of about 500 billion won after it sold assets, including a controlling stake in affiliate Tongyang Cement, to repay debt.

The big day in the shareholders’ battle for control of Tongyang is March 30, when Tongyang holds its general shareholders meeting.

Eugene and Pinetree will compete with each other to plant their men in the company’s boardroom whose 10 seats are currently all occupied. They will first push to increase the board directorship to 16 in order to open the door for new directors, sources said.

By Lee Sun-young (milaya@heraldcorp.com)