Kyobo Life ends put option dispute with Affinity, GIC
Affinity and GIC reportedly exits at 234,000 won per share, above Affirma's earlier settlement price of 198,000 won
Kyobo Life Insurance said Friday that its financial investors Affinity Equity Partners and GIC agreed to offload the stake they hold in the insurer, ending a prolonged legal dispute over a put option.
The South Korean life insurer announced that the two investors decided to sell their stakes to financial firms, including Shinhan Securities. Affinity sold its 9.05 percent stake, while GIC, or the Government of Singapore Investment Corporation, disposing its 4.5 percent stake.
Industry sources estimate the shares were sold at around 234,000 won ($162) each, below the 245,000 won per share the firms originally paid in 2012.
'We are pleased to have reached a reasonable price that the market can accept,' said Kyobo Life co-CEO and President Cho Dae-kyu. 'This allows Kyobo Life to focus more on driving its transition into a holding company and addressing future challenges.'
The settlement concludes a seven-year legal standoff that began in October 2018 when the Affinity-led consortium exercised a put option, demanding Kyobo Life Chairman and CEO Shin Chang-jae repurchase their shares at 410,000 won per share. The investors argued that Shin failed to take the company public by 2015 as promised, while Shin dismissed the claim, calling the valuation excessive.
Although the original agreement required Shin to repurchase the shares at a premium, the final settlement appears to reflect factors such as Kyobo Life's recent stock valuation — estimated at around 198,000 won — and dividends paid to investors over the past 13 years.
The consortium, formed in 2012 to acquire a 24 percent stake in Kyobo Life for 1.2 trillion won from the now-defunct Daewoo International, included a clause allowing investors to trigger a put option against Shin if Kyobo Life failed to go public within three years.
The dispute escalated to arbitration at the International Chamber of Commerce, which ruled that Shin must repurchase the consortium's shares at a fair market price. Kyobo Life has been undergoing a valuation process with external appraiser EY Hanyoung since the ICC's second ruling in December.
Market watchers had anticipated a swift resolution following the successful exit of Affirma Capital, another Kyobo Life investor involved in a similar put option dispute, last month. Shin repurchased Affirma's 5.33 percent stake at 198,000 won per share last month.
Industry insiders also suggest that the leadership of CEO Charles Min at Affinity Korea, who took office in 2023, may have accelerated stalled negotiations.
'We have reached a reasonable agreement through ongoing discussions aimed at benefiting all stakeholders,' Min said in a statement Friday, adding, 'Although our partnership is ending, we remain supportive of Kyobo Life's continued growth.'
With Affinity and GIC now exiting, the consortium is dissolved, leaving the remaining investors, IMM Private Equity and EQT Partners, to continue independent negotiations to divest their 5.23 percent stakes.
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