The ‘Special Committee’ That Will Decide Gabia’s Tender Offer—Why Accounting Firms Declined [fn Market Watch]

[Financial News] Gabia’s tender offer battle is reaching a turning point. A special committee reviewing the tender offer’s legitimacy and the fairness of its price and procedures will issue its recommendation early next week. To dispel concerns about the committee’s independence, Gabia fully replaced its existing independent-director-led committee with outside experts who have no ties to the company or its major shareholders.
In particular, the special committee sent requests for proposals (RFPs) to major accounting firms to select a financial adviser, but they reportedly responded that it would be difficult to accept the engagement because of potential conflicts of interest with the tender offeror. This highlights the complex web of interests surrounding the tender offer.
According to Gabia on the 4th, the company established the special committee through a board resolution on July 30. The committee, which initially consisted of two independent directors, identified the legitimacy of the transaction’s purpose, the fairness of its terms, and the appropriateness of its procedures as key areas for review. Gabia appointed Shin & Kim LLC as its legal adviser but failed to secure a financial adviser.
Gabia had already overhauled the committee’s composition on the 28th of last month. Instead of the two existing independent directors, it entrusted the decision to three outside experts: two law school professors and one business administration professor. The outside members were appointed following recommendations from the independent directors, rather than by the board.
The new special committee is reviewing not only the existing materials but also additional documents requested from the tender offeror and minority shareholders. The aim is to verify the claims of all stakeholders involved in the tender offer, rather than conduct a formal process that merely examines the company’s position.
Industry observers say that, alongside the “direction” of the special committee’s recommendation, the key issue will be how transparently it discloses the grounds for its decision. Simply concluding that it supports or opposes the tender offer would make it difficult to resolve concerns about the committee’s independence.
A senior investment banking industry official said, “The key issue is not the establishment of the special committee itself, but whether it can actually make an independent judgment free from the board and major shareholders. Since the committee has been fully replaced with outside members, the market will judge it based on what grounds it used to evaluate the tender offer’s terms and procedures.”
The special committee will submit its final recommendation to Gabia early next week, and the company plans to disclose it.
Another investment banking industry official added, “Ultimately, the next battleground in this tender offer is not just the price. Whether the special committee merely endorses one side’s argument or delivers an independent judgment that also takes minority shareholders into account has become a new variable in the tender offer battle.” 


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