Gov't, ruling party agree to mandate public disclosure of unsolicited takeover bids

The government and the ruling Democratic Party of Korea (DPK) have reached an agreement to introduce a new system called the "bear hug" by the end of the year, according to a report from Tuesday. This system will mandate that prospective corporate acquirers publicly disclose details of unsolicited takeover offers, with the aim of revitalizing the nation's capital market.

Rep. Oh Gi-hyoung, chair of the party's Special Committee on K-Capital Market, revealed that his committee will expedite the process of amending the Capital Market Act to incorporate the bear hug system within the next year. This announcement came following a working-level consultation between DPK and the government at the National Assembly.

The bear hug is defined as a takeover offer publicly made by a prospective acquirer to compel the target company's board to consider the offer and express its stance. Oh explained that the primary objective is to require the disclosure of information about the purchase, thereby enabling market participants to make informed decisions based on that data, ultimately facilitating transactions.

Oh emphasized his commitment to persuading party members both inside and outside the party to pass the necessary bill before the end of the year.