Golden Spoon Investment Portfolio - Chapter 254

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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254. You were going to give it to me anyway.

Chairman Park Tae-hong, momentarily taken aback and rendered speechless, soon furrowed his brow as he regarded his second son.

“Explain yourself more clearly. I don’t follow.”
“Exactly as I said. We render the Midopa Department Store shares that the other party purchased at such a high price completely worthless.”

Seok-won shrugged his shoulders.

“And how exactly do you propose to accomplish that?”

At the repeated question, Seok-won answered with a smile playing at the corners of his mouth.

“The reason Midopa Department Store becomes the linchpin of the group’s control structure is because it holds 32.8% of Daeheung Textiles shares, isn’t it?”
“That’s right.”

Daheung Group was structured as a pyramid with Chairman Park Tae-hong at the center, flanked by two core subsidiaries—Midopa Department Store and Daeheung Textiles—each commanding numerous subsidiary companies below them.
On the surface, this appeared to be a reasonably ideal control structure, but a critical vulnerability emerged when Midopa Department Store became the largest shareholder by holding 32.8% of Daeheung Textiles shares.
Acquiring control of Midopa Department Store alone would grant complete dominion over Daeheung Textiles and the entire Daheung Group—a fatal weakness.

‘Though they claim it was an inevitable consequence of Midopa Department Store, the group’s cash cow, assisting the struggling Daeheung Textiles amid the textile industry’s downturn, the vulnerability it created was devastatingly lethal.’

Chairman Park Tae-hong was acutely aware of this vulnerability, yet Midopa Department Store was the only subsidiary consistently generating substantial profits, making it impossible to divest without consequence.

‘The fact that no hostile M&A has ever been attempted in the domestic market likely lulled Chairman Park Tae-hong and the group’s executives into complacency.’

Dismissing his thoughts, Seok-won opened his mouth again under the piercing gazes of the three men.

“If we transfer the Daeheung Textiles shares we hold to another party, wouldn’t the value of Midopa Department Store as an M&A target plummet?”

At this entirely unexpected proposal, Chairman Park Tae-hong and the two others widened their eyes in astonishment.

“…!”
“Transfer the textile shares to another party….”

They had only schemed to protect management rights through equity battles, never imagining such an approach, so everyone reacted as though they’d been struck on the head with a hammer.
Chief Secretary Gil Seong-ho, who grasped what Seok-won was aiming for, let out a low exclamation.

“If we follow the younger president’s plan, even in the worst case scenario, we won’t lose the entire group.”

His older brother, President Park Jin-hyung, also looked at him with an expression of surprise.

“How on earth did you come up with such an idea?”
“It’s simple. If we engage in an equity battle with Donghae Group, we might win, but the aftereffects would be substantial.”

President Park Jin-hyung nodded his head since that was precisely his concern.

“That’s true. The public acquisition price has already reached forty thousand won, and as the battle intensifies, there’s no way to predict how much higher it will climb.”
“Even if we win at the shareholders’ meeting and retain management rights, it would be a hollow victory.”

Immediately, to fund the equity battle, every penny of available capital in the group had been scraped together, causing numerous business plans including the expansion of the China Manufacturing Plant to be suspended or indefinitely postponed.
If it stopped there, it might be manageable, but if they urgently borrowed funds for equity acquisition through bank loans or private loans, it would inevitably become a burden later.

‘Anyone could tell that emergency funds lent in a situation where an equity battle is clearly underway would come with exorbitant interest rates.’

Moreover, considering the impending IMF crisis, engaging in an equity battle with Donghae Group was the worst possible strategy.
Chairman Park Tae-hong, who didn’t know the IMF was coming, and the two men alike understood well that equity competition was self-destructive.
Yet they had no choice but to scrape together funds and pour them in, because if they lost the group, there would be no reason to think about the future.

“Since the M&A attempt was revealed earlier than planned, Donghae Group is also facing increased financial burden in accumulating shares.”

At that, all three men nodded simultaneously.

“They’ve poured massive amounts of money to buy up stocks, but if Midopa Department Store turns out to be hollow, wouldn’t that be truly devastating?”

Seok-won raised one corner of his mouth slightly.
It was certainly a plan that could deal a significant blow to Donghae Group, but Chairman Park Tae-hong’s face had instead hardened rigidly.

“Are you saying we should abandon Midopa Department Store now? If we transfer the textile shares elsewhere as you suggest, we might prevent losing the entire group, but we’d still lose the subsidiaries under the department store.”

Chairman Park Tae-hong spoke with a dissatisfied tone.

“If the department store and subsidiaries like Korea Economic News and Daehung Securities are transferred, half the group disappears.”

Gil Seong-ho, the Chief Secretary sitting across from him, also expressed his concerns.
In truth, considering that Midopa Department Store was the group’s most profitable entity, losing it would inevitably cause Daheung Group’s fortunes to shrivel before our very eyes—as clear as seeing fire.
Daehung Securities, which had been acquired and was now thriving under Seok-won’s stewardship with consecutive years of black ink, was itself a subsidiary of Midopa Department Store, so there was nothing more to say.

“It’s certainly a fresh and ingenious approach, but the losses we’d have to bear by handing over Midopa Department Store seem greater than the gains.”

While everyone displayed skeptical reactions, Seok-won spoke with perfect composure.

“When did I ever say I was abandoning Midopa Department Store?”
“Didn’t you just say we’d sell off the textile stake to someone else and make Donghae Group pay a premium for Midopa Department Store’s shares?”
“That’s true, but I never said we’d hand the department store over to the other side.”
“What?”

Chairman Park Tae-hong furrowed his brows and stared at him.

“What in the world are you talking about…?”

President Park Jin-hyung shook his head and pressed his forehead while Chief Secretary Gil Seong-ho looked bewildered, and Seok-won continued speaking without a care, drawing all their gazes upon himself.

“I’ll raise the public acquisition price to make Donghae Group overpay for the shares, but before the emergency shareholders’ meeting, I’ll force them to dump all the stocks they’ve repurchased at rock-bottom prices.”

While everyone wore expressions of disbelief, Chairman Park Tae-hong demanded an explanation.

“That’s impossible. How could you possibly make that happen?”
“Because I—or rather, we—are going to strip an empty house.”

Seok-won flashed his teeth in a grin.

“Strip an empty house?”

Chairman Park Tae-hong frowned and tilted his head in confusion before finally losing his patience.

“Listen here! Explain yourself clearly!”
“Exactly as I said. We’ll turn their own move to seize control of Midopa Department Store right back on them and attack Donghae Oil instead.”

At that, Chairman Park Tae-hong’s eyes widened.

“Donghae Oil—isn’t that the parent company of Donghae Group?”
“Exactly. They control all their subsidiaries through Donghae Oil. If we target that, we can shake the entire Donghae Group—it’s their Achilles’ heel.”

Seok-won continued speaking calmly, observing the three men who couldn’t hide their astonishment.

“Chairman Woo Yong-gap and his family hold 27.6% of the shares—higher than our stake in Midopa Department Store, but still not enough to be considered a stable guarantee of management rights.”
“…!”

Considering that most conglomerate owners and their families typically held around 25% at most, this was by no means a small percentage.
But if Donghae Group became the target of a hostile takeover like Midopa Department Store, the situation would be entirely different.

“When they’ve poured all their capital into acquiring Midopa Department Store shares and find themselves unable to easily extricate themselves from that quagmire, an attack on Donghae Oil would place them in a position where they can neither advance nor retreat.”

Chairman Park Tae-hong’s eyes gleamed as he listened.

“Exactly! They can’t leisurely attack elsewhere while their main base is being stripped bare.”

Chairman Park Tae-hong struck his knee in delight, calling it a brilliant scheme, but Chief Secretary Gil Seong-ho maintained a cautious demeanor and pointed out a troubling aspect.

“But wouldn’t it be a disaster if Donghae Group secures management rights to Midopa Department Store before we’ve accumulated sufficient shares in Donghae Oil?”
“It’s a good idea, but the timing won’t be easy to coordinate. Besides, the opponent isn’t a fool—they won’t simply sit idle and take it.”

Still, since the method of striking at the opponent’s weakness was clear, President Park Jin-hyung expressed his regret.

“What if we’ve already accumulated shares in Donghae Oil?”
“You don’t mean to say—”

Seok-won answered with a confident smile playing across his face.

“I’ve already secured over 15% of Donghae Oil’s shares, and I’m continuing to acquire more.”
“!”

All three men wore expressions of shock at this fact they knew nothing about.
Chairman Park Tae-hong’s eyes widened as he leaned forward, pressing for answers.

“How is that even possible?”
“I simply employed the same methods that Donghae Group used.”

Chief Secretary Gil Seong-ho, understanding what he meant, drew in a sharp breath of alarm.

“So you’re saying you accumulated shares by posing as a foreign investor.”
“That’s right. You remember how I’ve been warning for years that our weak governance structure could make us a target for hostile M&A, don’t you?”
“Yes, you did.”

Park Tae-hong nodded slightly, his face etched with regret.

“I’d set up a few shell companies in Hong Kong as a precaution. The moment I learned that Donghae Group was targeting Midopa Department Store, I immediately began accumulating shares in Donghae Oil.”
“Impressive.”

Park Tae-hong exhaled softly in admiration, and his brother along with Chief Secretary Gil Seong-ho couldn’t help but marvel at such swift action.
While they had been scrambling to counter Donghae Group’s M&A attempt, Seok-won had already conceived of this brilliant stratagem and moved preemptively—there was no other way to feel about it.
Receiving everyone’s admiring gazes, Seok-won continued his explanation.

“Once I acquire just 5% more shares on top of what I’ve already secured and demand an extraordinary general meeting, Donghae Group will face tremendous pressure.”
“They certainly will.”
“At that point, they’ll be forced to choose: either risk everything and push forward with acquiring Midopa Department Store, or abandon the M&A and attempt negotiations with us.”
“Ha ha!”

Park Tae-hong’s expression, which had been rigid, suddenly softened as laughter burst forth.

“Remarkable. I thought we’d have to raise our guard and focus solely on defense. Instead, we end up striking them from behind. Just thinking about it is exhilarating.”
“Exactly. Donghae Group never imagined they’d be turned around like this.”

President Park Jin-hyung also nodded in agreement, his expression now relaxed.
Then Chief Secretary Gil Seong-ho pushed his gold-rimmed glasses up slightly with his finger and spoke.

“However, one question still remains.”
“What is it?”
“For your plan to work, Midopa Department Store would need to transfer its textile holdings elsewhere. But realistically, there’s no affiliated company with the capacity to do so. And if we resort to irregular methods, Donghae Group could seize on that and use it against us.”
“Ah, that’s fine—I’ll take those shares.”

When Seok-won answered casually, Park Tae-hong blinked and asked.

“You’ll take them?”
“Yes. To be more precise, I plan to acquire the textile shares through Daehung Venture Capital.”

At that, Chief Secretary Gil Seong-ho tilted his head and interjected.

“Even at the lowest possible price, we’d need at least hundreds of billions of won. As far as I know, Daehung Venture Capital doesn’t have that kind of liquid capital available.”
“We do. I’ve made additional investments to increase the capital by another 400 million dollars.”

Upon hearing this explanation, Chairman Park Tae-hong asked with the air of someone who had already guessed as much.

“With your own money?”
“Yes. Since it’s become my personal company now, I thought I’d develop it properly.”

All three men knew that Seok-won possessed considerable wealth, so they nodded in understanding.
For some reason, Seok-won glanced sideways at his older brother, President Park Jin-hyung, before continuing with the rest of the plan.

“Once we defend management rights this way and everything settles down, we’ll exchange the securities shares held by the group back in return.”
“Exchange the securities shares back in return?”
“You were planning to give the securities to me anyway.”

Seok-won spoke with a shameless expression.

“Well, that’s true, but….”

Then, as a thought suddenly crossed his mind, Chairman Park Tae-hong turned to look at his eldest son.

“Since we were going to separate the subsidiaries anyway, it wouldn’t be bad to reorganize the shareholding structure at this opportunity.”

All three immediately understood that this was a consideration for his older brother, President Park Jin-hyung—if Seok-won’s personal company, Daehung Venture Capital, became the major shareholder of Daeheung Textiles, the flagship subsidiary, there might be unnecessary misunderstandings.

“Yes. I think that would be best.”

Chairman Park Tae-hong gazed at his two sons with a gentle look and nodded in agreement.

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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