Golden Spoon Investor

Seok-won removed his jacket and handed it to the waitress standing behind him before taking a seat across from his brother.

"Were you drinking by yourself, without me?" he asked.

"I was just having a light sip while waiting," Jin-hyung replied with a faint smile before turning to the waitress standing nearby.

"Bring in the food I ordered," he instructed.

"Of course. Please wait a moment," the waitress said with a polite smile before sliding the door shut as she left.

Jin-hyung picked up a ceramic sake bottle adorned with cherry blossom patterns. "Here, have a drink," he said.

Seok-won extended his glass, and Jin-hyung poured the clear sake into it. The aroma wafting from the drink suggested it was of excellent quality.

"It's been a while since we had a meal together, just the two of us," Jin-hyung remarked.

"True," Seok-won agreed.

"No matter how busy we are, we should make time for things like this once in a while," Jin-hyung suggested.

"Well, I'd rather go on dates with pretty women than hang out with my brother," Seok-won replied with a smirk.

"You? A guy without a girlfriend talking like that?" Jin-hyung said, laughing.

Although women had always pursued Seok-won, thanks to his good looks, Jin-hyung knew his younger brother wasn't the type to date casually.

"So, did you learn anything in the U.S., or did you just come back with better comebacks?" Jin-hyung teased.

"Come on now. You know I was a scholarship student all four years," Seok-won shot back, refusing to back down.

Jin-hyung just chuckled at his brother's response. He couldn't deny that he liked this more relaxed and open version of Seok-won, who had grown more confident since his time abroad.

"Just drink," Jin-hyung said, raising his glass.

The two brothers clinked their glasses lightly and drank the sake in one shot. Seok-won picked up the sake bottle and filled Jin-hyung's empty glass.

"By the way," Seok-won began, "it might be a little early, but congratulations, hyung."

"Congratulations for what?" Jin-hyung asked.

"I heard from Father that you'll be promoted to president of Daehung Textile at the year-end personnel reshuffle."

"Well, that's how it turned out," Jin-hyung replied nonchalantly.

"A president of the flagship subsidiary in your early 30s? It's practically a coronation for the crown prince," Seok-won said with a hint of humour.

"Coronation, huh?" Jin-hyung said dismissively.

"That's what everyone will think. Father wouldn't place you directly in the president's seat instead of a vice-president's role if he wasn't planning to hand over the group to you," Seok-won said, shrugging.

Jin-hyung didn't outwardly agree, but inwardly, he couldn't deny the reasoning. Instead, he looked at his younger brother intently and asked, "Aren't you upset with Father?"

"Why would I be?" Seok-won replied.

"You're his son too," Jin-hyung pointed out, hinting at whether Seok-won harboured any resentment about not being given the chance to compete.

The question could have made the atmosphere heavy, but Seok-won responded lightly. "I was given the venture capital shares, wasn't I? And I don't intend to covet your share. I'm perfectly satisfied with what I have."

There was no trace of bitterness or regret in his tone, and Jin-hyung could sense his brother's sincerity. He nodded a hint of relief in his expression. "Thanks for saying that."

Jin-hyung assumed that Seok-won was graciously respecting their father's decision and stepping back. He appreciated his brother's attitude, though he couldn't have known Seok-won's true thoughts.

'For now, I'm okay with this,' Seok-won thought. 'But Daehung Group's core businesses like textiles and department stores will face increasing competition and declining growth. There's no reason for us to fight over something that will cause headaches in the future.'

To Seok-won, holding onto promising subsidiaries like the securities and venture capital arms while leaving the less promising businesses to his brother was the smarter move.

'I almost feel bad, dumping the burdens on him while I walk away with the gold,' he mused. But he resolved to help his brother through the challenges ahead, including hostile takeovers and the upcoming IMF crisis.

Just then, a knock sounded at the door, and two waitresses entered carrying the dishes they had ordered. They set the table with utensils and side dishes before placing black ceramic bowls in front of the brothers.

"This is steamed scallops in a sweet and sour sauce to whet your appetite," one waitress explained.

Jin-hyung tried a bite and nodded in approval. "It's good. You should try it."

Seok-won tasted it and agreed. "The chef knows their stuff."

Next came the appetizers, arranged artfully on white plates: sea urchin with konjac jelly, grilled mackerel, octopus, eggs, and jack beans on skewers. Each bite was perfectly balanced, making the chopsticks move on their own.

Then came the main course: slices of tuna belly and sea bream sashimi. The fresh fish melted in their mouths, leaving a rich and satisfying flavour.

As the meal progressed and their hunger subsided, Jin-hyung set down his sake glass and asked, "You said you had something to talk about. Let's hear it."

Seok-won wiped his mouth with a napkin and adopted a serious tone. "First, I'd like you to hear me out without jumping to conclusions."

"Why are you scaring me before you even say anything?" Jin-hyung said with a laugh, but Seok-won's expression remained serious.

"I've been reviewing the group's governance structure, and I think there's a problem," Seok-won began.

The unexpected topic made Jin-hyung frown. He hadn't anticipated a discussion about corporate governance during dinner. "What kind of problem?"

Seok-won continued, his tone heavy. "The group is structured like a pyramid, with the department stores and textile businesses as the two main pillars holding up the subsidiaries."

Jin-hyung nodded, visualizing the organizational chart in his mind.

"On the surface, it looks solid. But if you look closer, there's a critical vulnerability," Seok-won said.

Jin-hyung's expression grew more serious as Seok-won pointed out the flaw. "Our family collectively owns only 19.6% of the department store shares, and the textiles division is even lower, below 19%."

"True, but the department stores hold a 32.8% stake in textiles, so there's no issue maintaining control," Jin-hyung said.

"That's exactly where the group's weak point lies," Seok-won countered.

Jin-hyung's brows furrowed further as he listened.

"If someone were to target the department stores for a hostile takeover, they could potentially gain control of the entire group," Seok-won explained.

Jin-hyung's face hardened as he realized the implications.

"All they'd need to do is acquire 30% of the department store shares, and they'd not only control the department stores but the entire group," Seok-won said, emphasizing the danger.

A heavy silence fell over the room as Jin-hyung digested the grim scenario.

Jin-hyung swallowed hard, his throat dry from the gravity of Seok-won's words. He wanted to deny the possibility, but the logic was airtight. The interconnected nature of the group's governance structure meant that such a takeover was entirely plausible.

Seok-won pressed on, driving the point home. "With just a few thousand billion won, they could seize control of the department stores, which would also give them control over the group's textiles and its other assets worth trillions. If it were me, I wouldn't hesitate to target such a vulnerable and lucrative prize."

The weight of Seok-won's argument hung in the air, and Jin-hyung felt an icy chill run down his spine. His stiffened posture and the way he clenched his jaw betrayed his internal struggle.

Breaking the tense silence, Jin-hyung finally spoke, his voice restrained. "I see your point. There's a vulnerability in the governance structure. But we've operated without issues until now, so I don't think it's something we need to panic about."

Seok-won opened his mouth to respond, but Jin-hyung cut him off. "That doesn't mean I'll ignore it. Now that I'm aware of the weakness, I'll make plans to address it gradually."

Although Seok-won had anticipated this response, he couldn't help but feel frustrated. He understood why Jin-hyung might not perceive the urgency—after all, South Korea had never experienced a high-profile hostile takeover before. But Seok-won knew what the future held, and ignoring the issue was not an option.

"This isn't a situation to be complacent about, hyung," Seok-won said firmly.

Jin-hyung's eyes narrowed sharply. "Do you know something I don't? Are there people actively plotting to take over the group?"

"No, nothing specific," Seok-won replied, shaking his head. "But with a structure this fragile, it's only a matter of time before someone takes notice. If we don't shore up our defences, it's not a matter of if, but when."

Jin-hyung exhaled deeply, his brows knitted in thought. "Fine, I get it. But why are you pushing this so urgently when nothing has happened yet?"

Seok-won suppressed a sigh. Because it's going to happen soon, and you don't even see it coming.

But he couldn't explain how he knew the future, so he reframed his argument. "Carrying around a ticking time bomb without knowing when it'll explode—that's no way to run a business."

Jin-hyung studied his younger brother's face intently. For a fleeting moment, he entertained a suspicion: was Seok-won angling for something more? Was this about his ambitions for the group?

However, he quickly dismissed the thought. If Seok-won were harbouring ulterior motives, he wouldn't be pointing out the group's weaknesses so candidly. Sharing this information was an act of trust and concern, not manipulation.

With this reassurance, Jin-hyung softened. "You're right; it's something we need to address. But the truth is, even if we wanted to improve the governance structure, we don't have the funds to do it right now."

Seok-won frowned. "Are things that tight?"

Jin-hyung poured himself another glass of sake and took a long sip before answering. "It wasn't so bad right after we acquired Daehung Securities last year. But with competition in the department store sector intensifying and the textile industry struggling for years, our profits have been shrinking rapidly."

The ongoing rise in labour costs had made the textile industry increasingly unviable in South Korea, and Daehung Group's department stores were losing ground to aggressive competitors like Lotte and Utopia Department Stores.

"The situation's even tougher because we're planning to relocate most of our domestic textile factories to China to cut costs. That's tying up any spare funds we might have had for acquiring additional shares."

"I didn't realize it was that bad," Seok-won murmured, his concern evident.

Jin-hyung offered a wry smile, tinged with regret. "Still, it's not as though the group is on the verge of collapse. We'll weather this storm, and when things improve, we can start addressing the governance issues."

Realizing that pressing the matter further wouldn't help, Seok-won decided to back off for now. "Alright. But stay vigilant, hyung. You never know when someone might strike."

"I will," Jin-hyung said, nodding. A faint smile appeared on his face as he added, "Having you by my side like this—it's reassuring."

"Well, we're family, aren't we?" Seok-won replied with a shrug.

"Enough heavy talk. Let's just enjoy the rest of the meal," Jin-hyung said, raising his glass.

They clinked glasses again, and Seok-won downed the remaining sake in one gulp. As the warm liquid burned its way down his throat, he couldn't shake the feeling of impending danger.

"No matter what I say, it seems like a hostile takeover is inevitable," he thought grimly. Even as he forced a smile, a faint bitterness lingered behind it.

TL/n - 

A hostile takeover occurs when one company (the "acquirer") attempts to acquire another company (the "target") against the wishes of the target company's management and board of directors. The acquirer usually bypasses the target's management by appealing directly to its shareholders or by making an offer to buy a controlling stake in the company.

Kraft Foods made an unsolicited bid to acquire Cadbury, a British confectionery company.

Initially, Cadbury's board rejected the offer, arguing that it undervalued the company and did not align with Cadbury's interests.

Despite the rejection, Kraft made a higher offer, directly appealing to Cadbury's shareholders.

Ultimately, Cadbury's shareholders accepted Kraft's offer, and Kraft gained control of Cadbury.

The deal was valued at approximately $19 billion, and it remains one of the most high-profile hostile takeovers in recent corporate history.