updated 2/27/2006 8:12:03 AM ET 2006-02-27T13:12:03

South Korea's KT&G Corp. on Monday rejected an unsolicited takeover bid by a group of investors led by U.S. billionaire Carl Icahn.

"The board of directors determined that it does not help maximize interests of the company and shareholders to accept the proposal," KT&G said in a statement.

Icahn and other investors had last week proposed in a letter to chief executive Kwak Young-kyoon an offer of 60,000 won, or $62, a share for the company, which produces tobacco products and items related to the ginseng root, popular in Asia for its perceived health benefits.

The offer values the company at about 9.57 trillion won, or $9.9 billion.

But Kwak said Monday the board had unanimously rejected the proposal "as conditional and lacking any certainty as to structure, timing, financing or future plans for the company."

"The board believes that the company's focus should be on continuing to build on its existing strengths and capitalizing on current and future business and financial opportunities," Kwak said, according to the company statement.

If the takeover attempt is successful, it would be the first unsolicited buyout of a major South Korean company by overseas investors.

The news sent shares in KT&G up slightly midday Monday, rising just over 1 percent to 57,600 won ($59.32).

Three funds controlled by Icahn — including Icahn Partners Master Fund LP and another fund, Steel Partners II LP — have become the second-largest holders of KT&G, amassing about 6.7 percent of the company's total shares, some 10.7 million, since last year.

Jason Booth, a spokesman for Steel Partners, declined comment Monday on KT&G's decision.

The investors have been calling for KT&G to float shares in its ginseng subsidiary and to sell landholdings to improve the company's share price.

KT&G argued Monday it has done well by its investors, claiming it has outperformed other international companies in the sector and Korea's main stock index, and that its share price rose 204 percent from January 2003 through earlier this month.

A showdown on the bid is expected at the company's annual shareholders' meeting set for March 17. The investors have nominated three people to compete for two openings for outside directors on the company's board.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
13.79%
Cash Back Cards 17.80%
17.78%
Rewards Cards 17.18%
17.17%
Source: Bankrate.com