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'Why Now?' The Mystery Behind Daebaek Savings Bank's Purchase of Daegu Department Store Shares

[비즈한국] It has been confirmed that Daebaek Savings Bank purchased shares of Daegu Department Store006370 on the open market in December of last year. Both Daebaek Savings Bank and Daegu Department Store are majority-owned by Koo Jung-mo, the CEO of Daegu Department Store. CEO Koo is currently pushing for the sale of both companies. Aside from this, the acquisition of Daegu Department Store shares by Daebaek Savings Bank raises questions. This is because Daegu Department Store lacks significant investment value, and the acquired stake is not at a level that would influence management rights.

CEO Koo Jung-mo owns a 39.20% stake in Daebaek Savings Bank, which increases to 71.47% when including shares held by specially related parties. CEO Koo currently serves as a non-executive director at Daebaek Savings Bank.

Daegu Department Store held a 9% stake in Daebaek Savings Bank at the end of 2024 but sold it off entirely last year. However, it has been confirmed that Daebaek Savings Bank recently purchased shares of Daegu Department Store. Daebaek Savings Bank held a 0.78% stake in Daegu Department Store at the end of 2024 and increased it to 0.86% in the middle of last year. It then made additional purchases in December of last year, currently holding a 1.16% stake in the department store.

Assessments suggest that the investment value of Daegu Department Store is not high. The company has been recording losses for several years, and its sales are also on a downward trend. Its stock price is also falling. While it once hit 11,000 won in February of last year, it currently hovers around the 5,000 won level. Daebaek Savings Bank acquired the Daegu Department Store shares at 5,900 won per share. Considering the current stock price of Daegu Department Store, Daebaek Savings Bank has essentially incurred a loss.

Daebaek Savings Bank spent 188.8 million won to acquire the Daegu Department Store shares in December last year. While not a massive sum, it is not an insignificant amount for the savings bank. As of the end of September last year, Daebaek Savings Bank's cash and cash equivalents stood at around 1.1 billion won. Furthermore, a 1.16% stake is hardly enough to significantly influence management rights. CEO Koo Jung-mo and his related parties already hold a 32.64% stake in Daegu Department Store. Other than CEO Koo, there are no prominent major shareholders in the department store.

Most notably, both Daegu Department Store and Daebaek Savings Bank are currently listed for sale in the M&A market. CEO Koo Jung-mo began an open sale of the management rights for Daegu Department Store last year and is also reportedly pushing for the sale of Daebaek Savings Bank. Daebaek Savings Bank is not typically aggressive in its investments, yet it chose to purchase shares of Daegu Department Store with a sale pending. Although 3 to 4 companies participated in the preliminary bidding for Daegu Department Store last year, there has been no news since. The sale of Daebaek Savings Bank is also reported to have made no progress to date. In the current atmosphere, there is a possibility that the sales could fall through or be prolonged.

Because of this, some analyze that Daebaek Savings Bank purchased the shares to boost the stock price of Daegu Department Store. However, Daegu Department Store's stock price did not rise significantly even after Daebaek Savings Bank acquired the shares. An official from Daebaek Savings Bank stated, "We purchased the shares for simple investment purposes."