SEOUL — SMEC, a prominent South Korean machine tool manufacturer, has launched a formal counteroffensive against a hostile takeover bid by SNT Group. By mobilizing treasury shares and strengthening internal stakes, SMEC is bracing for a high-stakes voting showdown at the upcoming annual shareholders' meeting in March 2025.
According to a regulatory filing on December 26, SMEC announced it would sell 770,000 treasury shares (1.12%) to its partner, Manho Steel, and allocate approximately 1.9 million shares (2.78%) to its employee stock ownership association and staff. While treasury shares typically do not carry voting rights, these rights are reinstated once the shares are sold to third parties. This strategic move is expected to secure a critical 3.9% block of friendly votes for current management.
The conflict escalated last month when SNT Group, led by Chairman Choi Pyeong-gyu, increased its stake to 20.2% and officially changed its investment purpose from "simple investment" to "participating in management." This declaration followed SMEC’s rise to the industry’s No. 2 position after acquiring Hyundai Wia’s machine tool business for 340 billion won earlier this year.
In response, SMEC CEO Choi Young-seop has been aggressively consolidating power. Through purchases by his family and company executives, the friendly stake in SMEC has climbed to an estimated 18.7%. This effectively narrows the ownership gap with SNT Group to just over 1 percentage point, down from a previous 8-point lead.
Market analysts predict a fierce battle to secure "White Knights" before the year-end record date for voting rights. "While SNT holds a superior cash position for further acquisitions, SMEC is leveraging its network of partners and internal loyalty," an industry insider noted. "The emergence of new allies, such as private equity firms, could decide the final outcome."
As the boardroom battle intensifies, SMEC’s stock price has surged from the 1,900-won range in June to over 6,000 won, tripling its market capitalization to 450 billion won in just six months. With the entire six-member board of directors up for renewal in March, the upcoming shareholders' meeting is set to be the ultimate battlefield for the future of Korea’s machine tool industry.
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