Story of a Big Player from Gangnam

Looking at W Group’s chairman doing his math using his small calculator with his thick hand somewhat amused Gun-Ho. He looked like a bear fiddling with his tiny prey.

‘Well, at least he is doing his calculation himself even though he has to wear his reading glasses to see the small numbers, without asking someone else to do the job for him.’

Gun-Ho remembered that he read a news article the other day about W Group’s chairman. He had an interview with a news report.

In that interview, W Group’s chairman claimed that technically he was not a second-generation rich kid. In fact, he inherited 1 trillion won worth of business from his father, and he grew it to a 10 trillion won worth of business. That was the reason why he insisted that he was a first-generation of wealth that he built. Gun-Ho remembered that Egnopak’s president made about the same statement before as well. This news article written based on the interview with W Group’s chairman made Gun-Ho smile sarcastically when he read it.

At that time, Gun-Ho thought, ‘What? He is saying that he is not a second-generation rich kid because he grew the company to its current 10 trillion won worth, which was worth only 1 trillion won when he had inherited it from his father? He described himself as a pioneer of the entrepreneurial spirit, which is bullsh*t. Has he ever eaten a tear-soaked bread before? Has he ever lived in a tiny room that has no private toilet and no window?

Look. It’s extremely difficult for a person to make 100 million won, who has no money at all. And, it is also difficult for a person to make 1 billion won, who has only 100 million won. However, it is not difficult at all for a person, who has 1 trillion won, to make 10 trillion won. Once you reach that level, you don’t really have to do much, but by letting the company do its work, it will grow along with the country’s economic growth. The CEOs that you hire to run your business will do the job for you. So, stop talking nonsense.’

This was the impression that Gun-Ho had about W Group’s chairman even before he had a chance to meet him in person. Now, by looking at him doing his math with his own hands by diligently pressing buttons on his calculator, Gun-Ho thought that he was someone who would do his job himself at least.

W Group’s chairman asked Gun-Ho, “What about 30,000 won per share? In my view, even though I have to take into account every possible value of Dyeon Korea, including the right to manage, the right to sell, and the company’s future business value, 30,000 won per share would be a generous offer. If the price is higher than that, I wouldn’t be able to make much out of this deal. Don’t you think?” The chairman turned his head to W Chemicals’ CEO and CEO Park to seek for their agreement.

“You are absolutely right, sir. Your view gives a clear perspective to this matter, sir,” The two men replied simultaneously as if they planned to do so.

Gun-Ho said, “30,000 won per share would make the total price 255 billion won. I think you undervalued the company’s future business, its right to manage, and its right to sell, sir.”

“You are one greedy young man,” said the chairman.

Silence filled the air for a while.

The chairman said to W Chemicals’ CEO, “If we acquire Dyeon Korea, would it be really helpful for our company’s business?”

“Yes, sir. It would be absolutely beneficial. As you know, sir, Lymondell Dyeon’s compounding technology is world-class. If W Chemicals owns this company, it will definitely create synergy.”

“Hmm.”

“In addition, our company has numerous distributors scattered all over the country. We can use our sales networks in selling Dyeon Korea’s products, and it will increase our sales substantially in a short period of time. However, if we have to buy the company for 35,000 won per share, then it wouldn’t be a very attractive business deal for us. We can consider acquiring it if the price is 30,000 won per share, but if it is firmly priced for 35,000 won per share, then I believe there is no payability for us.”

A Group’s CEO Park, who had been quiet the whole time, chipped in, “President Goo, it is true that W Chemicals will benefit from acquiring Dyeon Korea, in selling products and expanding its businesses. Moreover, the acquisition will definitely contribute to bringing Lymondell Dyeon’s compounding technology into Korea’s market. So, the acquisition is desirable for the company and also for the country. Why don’t you lower your price a little bit? Your price does seem to be excessive.”

“I don’t know.”

Gun-Ho was thinking, ‘Is my asking price that excessive?’

Gun-Ho then did his math considering various factors with his calculator. The chairman, who was looking vacantly at Gun-Ho doing his calculation, seemed to make his determination and said, “Let me be straight here. I like to be direct and bold. Let’s make it 32,000 won per share. So, the total price will be 272 billion won. What do you say?”

A Group’s CEO Park quickly chipped in.

“That sounds very reasonable. I can see the chairman trying hard to reach an agreement, President Goo.”

W Chemicals’ CEO added, “That wouldn’t still be an ideal price for us, but 32,000 won per share is doable.”

Gun-Ho looked up at the ceiling and then he firmly said, “Okay. Let’s do it.”

The chairman laughed feeling satisfied, and he extended his hand to Gun-Ho for a handshake. Gun-Ho held the chairman’s hand showing his acute respect toward him.

“You are a well-mannered young man as well. Where is GH Mobile located, by the way?”

“It’s in Jiksan Town, Cheonan City, sir,” said Gun-Ho as he handed his business card to the chairman.

“Since GH Mobile is the one that invested in Dyeon Korea, once Dyeon Korea is sold, I guess that the money will flow into GH Mobile. How much ownership interest are you holding in GH Mobile, President Goo?”

“I own 82% of GH Mobile, sir.”

“Who owns the rest of the ownership interest?”

“I have a co-president—President Song—there. He owns 3%, and the remaining 15% is owned by another individual.”

“Oh, it’s not an institutional investor but it’s an individual who owns 15%, huh?”

“That’s correct, sir.”

A wicked smile appeared on W Group’s chairman’s face; he was nodding his head. It seemed that he figured out something at that moment.

“Hmm, I see.”

The chairman’s smile froze Gun-Ho’s blood for a second. The act of nodding his head as if he knew everything that was going on certainly didn’t give Gun-Ho a pleasant feeling. Gun-Ho thought that maybe the chairman knew that it was Mr. Beom-Sik Lee who owned 15% of GH Mobile.

W Chemicals’ CEO said as he was standing up from his seat, “Well, since we have reached an agreement for the sales price, we will proceed with it as such. We will work on the paperwork now, sir.”

“Sounds good.”

Gun-Ho was walking toward the door to leave the office after giving a 90-degree bow to the chairman when the chairman said to Gun-Ho, “Your name is Gun-Ho Goo, right, President Goo? I will remember your name for a long time.”

“Thank you, sir.”

Gun-Ho, W Chemicals’ CEO, and A Group’s CEO Park walked out of the chairman’s office, and they headed back to the meeting room where they had met for the first time that day. In the meeting room, they drafted the stock transfer agreement.

W Chemicals’ CEO said, “Today is December 6th. We will send you our payment on December 15th. As you know, 272 billion won is not a small amount of money. We need time to prepare that amount.”

“I understand. In the meantime, I will have to talk with the company’s executive officers about this deal anyway.”

“Well, please keep me posted with how things go with its executive officers. Also, our people will pay a visit to the company soon in order to verify the actual status of the company and all that. It’s a usual procedure to make sure that all the assets are there as claimed in its financial statements.”

“Of course.”

“After we conduct our investigation, if we find a large gap between the facts shown in the documents that you showed us today and the actual assets, the contract will be void.”

“I see what you mean.”