Lee: "Market Concerns Over Mandatory Tender Offer Debate... Excessive Regulation Won't Benefit Minority Shareholders Either"

President Lee Seeks Opinions on Mandatory Tender Offers via X

President Lee Jae Myung sought opinions on X (formerly Twitter) on Oct. 28 regarding discussions about mandatory tender offers, saying, "Considerable concerns and practical considerations are emerging both within and outside the market over the specific acquisition ratio and method."

Mandatory tender offers are being discussed as a way to protect the rights of ordinary shareholders in corporate M&A deals. The key idea is to require an acquirer to purchase shares held by ordinary minority shareholders on terms equal to or better than those offered to the controlling shareholder.

President Lee Jae Myung speaks at a Cabinet meeting held at Cheong Wa Dae on Oct. 27, 2026. Yonhap News Agency

President Lee said, "Some argue that an acquirer should be required to purchase '50% plus one share,' including the controlling shareholder's stake, while guaranteeing minority shareholders the right to sell by allocating the purchase fairly among them." He noted, "In that case, the controlling shareholder transferring control would be unable to sell their entire stake and would have to sell the remaining shares at the market price."

He added, "That is why some say the controlling shareholder would naturally have less incentive to sell, potentially discouraging corporate restructuring and sound M&A deals themselves."

President Lee also observed, "On the other hand, requiring the purchase of 100% of the shares would place an excessive financial burden on the acquirer, creating the dilemma of significantly reducing the likelihood that deals will be completed." He added, "The principle of equal treatment for shareholders is important, but if excessive regulation weakens companies' ability to improve their fundamentals and undermines the vitality of the capital market, it may not benefit minority shareholders in the long run."

President Lee noted, "There is also a middle-ground proposal to promote M&A by requiring the purchase of 50% plus one share, while allowing minority shareholders to tender their shares on a pro-rata basis only after the acquirer has purchased the controlling shareholder's entire stake."

He sought opinions, saying, "This is a time when we need the wisdom of people from all walks of life to determine what the mandatory purchase ratio should be and how to genuinely reconcile the interests of controlling and minority shareholders." He asked, "What would be the most reasonable balance that genuinely protects minority shareholders' rights without sapping momentum from the M&A market?"

This content was produced with the assistance of AI translation services.