Hyundai Department Store cancels spinoff plan as shareholders disapproved

Hyundai Department Store Group Co. decided to drop its spinoff plans after the shareholders objected. It was said that they are worried about two things which is why they are against the plan.

First, the shareholders are anxious about the declining competitiveness of the company’s retail unit and second, they noticed the increasing control of the group chairman. It was shared that the spinoff plan has been in place since September 2022 but this will now be shelved due to opposition from shareholders.

According to Pulse News, Hyundai Department Store said on Friday, Feb. 10, that part of the plan for the spinoff was to set up a holding company that was tentatively named Hyundai Department Store Holdings. But the shareholders do not want this and have been voted down.

The voting took place during a recent meeting that was attended by shareholders with a combined shares total of 15,787,252. It was reported that 64.9% voted for the scheme to go ahead but 35.1% voted against it. As a rule, the officials need to gain two-thirds or 66.6% of the votes for the plan to continue.

If they have succeeded in gaining the needed votes, Hyundai Department Store would have been split into Hyundai Department Store Holdings and Hyundai Department Store that will fully focus on retail store operations. On the other hand, the former will be given the task of managing Han Moo Shopping Co., Zinus department store, and duty-free stores.

Finally, the department store chain decided to accept the activist shareholders’ decision. It has issued a statement to share its reaction.

“We humbly accept the decision and decided to stop the transition into a holding company system that we had been pushing for,” The Korea Economic Daily quoted the company as saying in a statement. “We have no plan to seek the transition through a split-off again in the future.”