MmeEmil
An activist investor is said to have acquired a stake in Korean tobacco firm KT&G (OTCPK:KTCIF) and is pushing for the company to improve, including spinning off its ginseng business.
Flashlight Capital Partners, which was founded by Carlyle Group’s former head of Korea, is calling for a ginseng business spin-off, divesting non-core assets and adding new directors to KT&G’s board, according to a letter viewed by Seeking Alpha.
“While we think the company possesses extremely valuable assets and impressive market share, we believe embracing meaningful environmental, social and governance (“ESG”) improvements and adding fresh perspectives to the Board of Directors (the “Board”) can help KT&G close its significant 50% trading discount and deliver enhanced value to all stakeholders,” Flashlight Capital Managing Partner Sanghyun Lee wrote in the letter.
Flashlight Capital said it has had private discussions with KT&G leadership over the last six months and believes its recommendations could lead to a 100% upside over the next year and 5x over the next five years.
Flashlight is said to have built a 1% stake in KT&G, according to a WSJ report, which reported the news earlier Thursday.
While KT&G shares have risen 13% in Korea this year, it’s trading at the same price it was 15 years ago and at a “steep” discount to its peer, according to the letter.
