DB Insurance becomes Daol Investment’s No.2 shareholder

DB Insurance Co., a leading South Korean non-life insurance company, has become Daol Investment & Securities Co.'s second-largest shareholder after purchasing a 9.73% stake in the small-sized brokerage firm.

DB Insurance said in a regulatory filing on Monday that it has bought the stake from its existing No. 2 shareholder Kim Ki-soo, head of Presto Investment Advisory, in a block deal for 23.1 billion won ($16.3 million).

Its purchase price of 3,900 won per share represents a 6.4% premium on its closing price last Friday.

The insurer first approached Kim for the block deal, according to industry sources.

DB Insurance classified the stake purchase as a “general investment,” a step above “simple investment” under local disclosure rules. The designation suggests the insurer may exercise shareholder rights more actively.

South Korea categorizes investment purposes into three tiers: simple investment, general investment and participation in management.

The block deal could signal a potential takeover bid for Dal Investment & Securities, leaving it vulnerable to management disputes with its top shareholder and Chairman Lee Byung-chul, industry observers warn.

Lee holds a 25.18% stake in Daol Investment & Securities.

If DB Insurance joins hands with Daol’s No. 3 shareholder Seko Group, a Korean aerospace components manufacturer, they could threaten the top shareholder’s management rights.

The insurer could seek a merger of its sibling DB Securities Co. with Daol Investment & Securities, said industry observers.

Write to Jong-Kwan Park at pjk@hankyung.com
 


Yeonhee Kim edited this article.