As Mom’s Touch voluntarily delisted, a scene of crying and laughter is unfolding among the employees. This is because the difference in compensation increased significantly depending on the exercise date of stock options (stock options). The application of a 20% premium to Mom’s Touch was effective as it went through a tender for delisting. As a result, the share price surged 17.9%.
The problem is that even following delisting in the future, stock option exercise dates are scheduled one following another.
According to Mom’s Touch on the 21st, F&B Holdings Korea, the largest shareholder, will make a tender offer of Mom’s Touch shares at 6,200 won per share until February 15. This is the amount by applying a 20.26% premium to the average share price of Mom’s Touch for the past three months at KRW 5155.
The Korea Exchange recommends that the largest shareholder secure at least 95% of the stake in the event of a voluntary delisting. It is noteworthy that there were mixed joys and losses among the executives and employees who were granted stock options during this process.
A typical example is employees who have recently exercised stock options. Mom’s Touch can exercise stock options through compensation for the difference, and Mom’s Touch’s stock options exercised this month amounted to a total of 3902 shares. Considering the exercise price of 2031 won per share, it is estimated that they made a profit of regarding 3,000 won or more per share. The last event was on the 12th, regarding a week before the tender offer.
A similar case is the case with the first stock option (2,737,355 shares), whose exercise period ended on the 17th, and the second stock option (300,000 shares), which has been exercised until March 22, but has already been fully exercised.
In fact, the number of employees who will benefit from the tender offer of Mom’s Touch is limited. Excluding the amount that has already been exercised or canceled out of 559,790 shares of the 3rd stock option, the remaining number of shares is only 93,310 shares.
An official from Mom’s Touch said, “Since stock options are determined by the stock price at the time of exercise, they can be exercised at any time even following the stock price surges following the tender offer.”
The most disappointing are the employees who have been given stock options following the 4th round. The 4th stock option (785713 shares) can be exercised from October 16, and the exercise price has jumped to 3,500 won per share. The 5th (285,714 weeks) will be held in November this year, the 6th (485,714 weeks) will be held in March next year, and the 7th (285,714 weeks) will be held following October next year. The price of the event has also risen to a maximum of 4,340 won.
It is highly probable that Mom’s Touch had already been delisted by the time their stock options were exercised. Since stock options usually compensate for the difference in share value increase due to business performance, it is not easy to judge whether the stock option strike price following the 4th round will exceed the stock price.
KL&Partners, a private equity fund that operates Mom’s Touch, said, “According to the relevant regulations, we will be able to decide whether to exercise each stock option by measuring fair value, etc.” and “It is possible to exercise stock options even following delisting” said.
