Shareholders of Tongyang Inc. are in a battle for control of the firm which recently graduated from a 28-month court receivership.

According to a filing on Thursday, Eugene Corp., the country’s largest ready-mixed concrete maker, has increased its stake in the firm by 0.45 percentage point to 9.31 percent, rising again to the position of largest shareholder. It also made clear that the purpose of its equity investment was “management participation.”


It is just one month after Pinetree Asset Management pushed Eugene to be the second-largest shareholder, increasing its shareholding to 9.15 percent

According to investment bank sources, Tongyang is an attractive target of a hostile takeover bid, as the holding company of Tong Yang Group sits on nearly 500 billion won of cash after asset sales.

The firm, whose main businesses are construction and construction materials including Remicon, last year sold its controlling stake in affiliate Tongyang Cement for 794 billion won to repay the remaining debt worth 300 billion won.

According to sources, Eugene’s rival is not just Pinetree. Sampyo, another major Korean ready-mixed concrete firm which bought the Tongyang Cement stake from Tongyang Inc., is widely expected to join the race.

“Sampyo is already in the list of Tongyang shareholders,” a local daily quoted an unnamed source as saying. For Sampyo, the takeover of Tongyang Inc. would be a way of recouping the 794 billion won it paid for Tongyang Cement shares, the report said.

To gain the management right, the companies will have to raise their stakes to 33.33 percent or beyond, as required by corporate law.

By Lee Sun-young
(milaya@heraldcorp.com">milaya@heraldcorp.com)