Episode summary
An Inside Look at Activist Value Investing in Korea | Ryan Albert
The Acquirers Podcast
· · 9 min · Hosts: Tobias Carlisle, Jake Taylor · Guests: Ryan Albert
Summary
Ryan Albert walks through an activist campaign at Golf Zone Holdings to show how recent Korean governance reforms are changing the playbook for minority investors. He says the company’s value was obscured by a holdco/opco structure, a minority stake in Golf Zone County, and a depressed share price that left the stock around 0.15 to 0.2 times book value. When the controlling shareholders launched a tender offer at a 50-something percent premium, Albert argued the price still badly underestimated the assets and the process lacked the disclosure and fairness protections emphasized in Korea’s new Ministry of Justice guidelines.
He says his open letters pushed on process issues, board duties, and the gap between the offer price and his estimate of fair value, which he puts at about 30,000 Korean won per share versus a 6,700 offer. During the first tender offer, the controlling group reached 85% but missed the 90% needed to delist, then relaunched at the same price. Albert says investors refused the second offer too, and a new capital markets rule effective August 20 changed how fair value must be assessed in listed-company transactions and appraisal rights.
The campaign ended with zero shares tendered in the second offer and the controlling group saying it would abandon delisting and pursue enhancing corporate value instead. For Albert, the case is a live example of how shareholder rights, fair-value standards, and disclosure expectations are starting to matter more in Korea.
Key takeaways
- Albert says Golf Zone Holdings traded at roughly 0.15 to 0.2 times book value, even though he believed its assets were worth far more.
- He argues the initial tender offer at 6,700 won per share was far below fair value, which he estimated at about 30,000 won per share.
- The controlling shareholders reached 85% in the first tender offer, short of the 90% needed to delist.
- Albert says Korea’s new rules on fair value, independent committees, fairness opinions, and fuller disclosure materially strengthened minority protections.
- After the second tender offer drew zero shares, the controlling group abandoned the delisting plan and said it would focus on enhancing corporate value.
Notable quotes
“the minute you own it, it's it's closer to one times book value. Maybe it's a little less, maybe it's even more”
“I felt that value was at least 30,000 Korean won per share. The tender offer price was uh close was was at 6,700”
“So we wrote an open letter highlighting all this. And gold that the tender offer, which is kind of in its own gray zone”
“So, that was enacted during the second tender offer um window, and that meaningfully changed the scope of what I was looking at”
“Like literally zero shares were tendered. So, immediately after that the controlling shareholder group made a press release saying they were seizing the de-listing process”
How the episode opens
Can Can you take us through a name that you're looking at to give us an idea how it's sort of being impacted?
Sure, I can talk about a engagement that I was recently doing um just cuz that I think live and stress tests some of some of the different uh aspects of governance reform. So, there's a company called Golf Zone Holdings um and it's all public. You can actually find it on my on a website that I set up dedicated to it called golfzonefairvalue.com.
So, www.golfzon um uh zonfairvalue.golfzonfairvalue.com. I have three open letters there. But basically, Golf Zone Holdings is a conglomerate that has various stakes in golf-related assets and its most valuable stake or is a minority stake in a company called Golf Zone County.
Golf Zone County is the largest golf course operator in Korea and its 68% partner is the largest private equity fund in Korea. And that asset is in is in the process of being sold. It was reported in the media that it was being sold.
So, and that if you took any relevant metric or relevant valuation of what that 32% stake was for Golf Zone Holding, which is the publicly traded holding company, was worth significantly more than the market cap of that company. And that does not even include the golf courses and real estate that that business owns and the it stakes in some other assets. So, seemed like an it was it was on my appraisal trading 0.15 to 0.2 times book value.
Uh pretty obscene prices. Um at the end of June um the controlling shareholders of that entity, which owned about 60% of the shares excluding treasury shares, set up a separate vehicle and they did a tender they they made a tender offer at a 50-something percent premium to the ongoing share price.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- activist value investing
- korea investing
- market crashes
- portfolio hedging
- tranche investing
Watch the episode
Watch “An Inside Look at Activist Value Investing in Korea | Ryan Albert” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Acquirers Podcast, this episode and its artwork belong to Tobias Carlisle. Octagon is not affiliated with the show; this page is an independent summary.
