Is Green Cross eyeing hostile takeover of Ildong?

Green Cross, a leading South Korean pharmaceutical company, sparked rumors of a hostile takeover of rival Ildong Pharmaceutical when it vowed to interfere in the selection of the latter’s board members on Monday.

As the second-largest shareholder of Ildong, the company said it has the right to choose two of the 10 board members in the next shareholders meeting. Three of the 10, including Ildong chairman Lee Jung-chi, end their terms next month.

Early in January last year, the takeover rumor erupted when Green Cross became Ildong’s No. 2 shareholder with a 29.36 percent stake. At that time, Green Cross did not rule out participating in Ildong’s management.

It also opposed moves by Ildong to turn into a holding company, citing normalization of management.

Both companies reportedly denied the fresh rumors. Green Cross said it has no plans to push for an M&A while Ildong said it is a usual practice in companies with similar stakes.

But industry sources said Green Cross is highly likely to promote the takeover of Ildong, with Green Cross chairman Cho Soon-tae expressing positive views about the company’s M&A efforts.

By Suk Gee-hyun (monicasuk@heraldcorp.com)