Retail Investors Thwart Sunjin Beauty Science's 'Physical Spin-off'... Company Responds with 3 Billion Won Treasury Stock Acquisition Decision

KOSDAQ-listed Sunjin Beauty Science suddenly withdrew its physical spin-off plan following fierce pushback from minority shareholders. Instead, the company immediately announced a plan to purchase 3 billion won worth of treasury stock in an effort to appease turned-away investor sentiment.

According to the Financial Supervisory Service's Electronic Disclosure System on the 1st, Sunjin Beauty Science filed a corrected disclosure stating that it held a board of directors meeting on the 30th of last month and resolved to withdraw its previously ongoing decision on a company split (physical spin-off).

The company stated, "Although the agenda to approve the spin-off plan itself was passed at the extraordinary general meeting of shareholders held on June 10, the amount of appraisal rights exercised by dissenting shareholders subsequently exceeded the company's set limit of 2 billion won, leading to the decision to halt and withdraw the spin-off process."

Sunjin Beauty Science, a company specializing in cosmetic materials, initially disclosed its decision for a physical spin-off on May 7. However, in the capital market, a physical spin-off is generally perceived as a negative event that damages shareholder value due to the separation of a lucrative business division. Accordingly, minority shareholders, who hold a 49.45% stake in the company, took collective action through a 'massive exercise of appraisal rights' even after the general meeting's approval, which is interpreted as having ultimately thwarted the company's business restructuring plan.

Having abandoned its physical spin-off plan, Sunjin Beauty Science immediately pulled out a shareholder return card on the same day. The company disclosed that it had decided to directly acquire 445,765 shares of common treasury stock, worth 3 billion won, on the open market for the purpose of enhancing shareholder value. The expected acquisition period spans three months, from July 1 to September 30.

An official from Sunjin Beauty Science stated, "We plan to carefully re-examine the business restructuring by comprehensively considering the future business environment and shareholder opinions," adding, "Through this treasury stock acquisition, we will do our best to stabilize the stock price and protect shareholders."