MBK Calls Golfzon Holdings' Opposition to Golfzon County Sale "Baseless Claims"

"Agreed to a drag-along if the IPO fell through"
Did not exercise its right of first offer
Made an inferior offer in competitive bidding

Golfzon Holdings has said it cannot agree to MBK Partners' sale of Golfzon County. MBK expressed regret, saying Golfzon Holdings' claims were nothing more than baseless assertions.

In a statement on October 29, MBK said, "We aim to correct Golfzon Holdings' false and distorted claims based on objective facts and the principles of the capital market."

First, MBK said it was Golfzon Holdings itself that agreed to a third-party sale of management control through a drag-along right if the initial public offering (IPO) fell through. The guarantee of management control was conditional on a successful IPO, and when the companies secured investment in 2018, they definitively included a clause granting the right to sell management control to a third party by bundling MBK's shares with those held by Golfzon Holdings in the event the IPO did not go ahead.

MBK emphasized, "The very existence of the drag-along clause proves that Golfzon Holdings itself understood and voluntarily signed an agreement stating that it would not be guaranteed management control if the IPO did not go ahead, and that the process for selling management control to a third party would then be followed." It added, "Distorting the lawful exercise of the drag-along right and the pursuit of a sale as 'unilateral' when the agreed listing has fallen through is an act of denying a legally binding contract."

MBK said that, in return for the drag-along right, it had also guaranteed Golfzon Holdings the right of first offer to acquire Golfzon County. Accordingly, it formally offered Golfzon Holdings the first opportunity to acquire the company before officially launching an external sale process. However, according to MBK, Golfzon Holdings made no offer and only replied that it hoped to pursue an IPO. MBK countered, "An IPO of Golfzon County is not feasible, given recent capital market review standards that strictly restrict the parallel listing of parent and subsidiary companies, as well as the emphasis on shareholder protection."

It added, "If Golfzon Holdings truly wanted to secure management control of Golfzon County, it should have made an offer under its right of first offer with a competitive price and terms, rather than putting forward an unrealistic excuse that would not hold up in the market."

After the right of first offer was presented, Golfzon Holdings indicated that it was willing to buy the company in a competitive bidding process. MBK emphasized, "The acquisition terms ultimately proposed by Golfzon Holdings were inferior and uncompetitive compared with those offered by The Siena Group, its competitor." It added, "As the seller and trustee, MBK was obligated to choose the best terms in accordance with the principle of good faith. It was therefore only natural, and a transparent outcome of the market, for MBK to sign an agreement to transfer management control to The Siena Group, which offered better terms."

MBK also said it was illogical to argue that, while Golfzon Holdings, as the strategic investor (SI), was supposed to pursue an IPO to help MBK, the financial investor (FI), smoothly exit its investment, the FI should instead complete the listing on its own and unconditionally guarantee the SI's management control. It also claimed that, after the initial attempt to list the company fell through, Golfzon Holdings merely expressed a desire to pursue an IPO and did not actually undertake any related work.

Finally, MBK said the lease agreements for the four golf courses were legally established through business decisions and mutual agreement between the two companies when they secured investment in 2018. It added, "Claiming that the agreements are 'unfair' and trying to undermine them after losing the acquisition contest is a classic case of self-contradiction."

MBK said, "We will hold Golfzon Holdings firmly and strictly accountable for its baseless distortion of facts, disruption of the market, and breach of contract."

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