The Midas touch of entertainment as the new owner of Bithumb?
W Holding Company Chairman Won Young-sik, who is said to have the Midas touch in entertainment, is out to takeover Bithumb. Entertainment company IOK is acquiring the convertible bonds of Bithumb’s largest stakeholder Vidente. This would make IOK the largest-shareholder of Vidente. The largest shareholder of IOK is Won, and that would make him the indirect owner of Bithumb. Won last month was acquitted of manipulating the stock of Homecast. And on his return, he seemed to have picked Bithumb as his first investment target. Bithumb→BTC Holding→Vidente→IOK According to the Financial Supervisory Service, IOK holds convertible bonds in Vidente that could be converted into 6,134,132 common shares. Considering that the conversion price of 5,730,581 of the shares is 7,364 won per share and for 403,551 it is 6,195 won per share, IOK will have invested roughly 44.7 billion won. On Oct. 31, Vidente agreed to purchase a 23.24 percent stake of BTC Holding, the holding company of Bithumb, for 115 billion won. Once the purchase is made, Vidente will own 32.74 percent of BTC Holding, becoming the largest-shareholder of Bithumb. Previously, the BXA consortium, led by BK Group Chairman Kim Byung-gun, was planning to acquire a 51 percent stake in BTC Holding. However, the contract was nullified as the consortium failed to pay for the acquisition, and Vidente is taking the place of BXA consortium. If it acquires the 51-percent stake, Vidente will have control of BTC Holding. Additionally, on Nov. 1 BTC Holding announced that it will be participating in Vidente’s paid-in capital increase by BT.One, which it is the largest-shareholder with 25.79 percent, which is to take place on Nov. 15. The paid-in capital increase is estimated to secure 55 billion won. Soon a circular equity investment structure, where BTC Holding will own a stake in Vidente, Vidente owns shares in BT.One and BT.One owns shares in BTC Holding, will be formed. The market speculates that in order to cut this investment chain, new investment is necessary. IOK’s acquisition of Vidente’s convertible bond is expected to cut the chain. IOK? IOK is a comprehensive entertainment company managing A-list celebrities, including actress Koh Hyun-jeong, Cho In-seong, HOT members Moon Hee-joon and Tony Ahn, Lee Jae-won and comedians like Lee Young-ja and Kim Sook. The company is investing nearly half of its market value into Bithumb. A company official in a recent interview with local media said one of the reasons it is investing half of its market value is because company chairman Won believes in cryptocurrency. The official added that the strategy is to become the largest shareholder of Vidente and through Vidente acquire Bithumb. Won Young-sik is back Won, 58, has done well with YG Plus, Chorokbaem Media and Wellmade Yedang. Through W Holding, which is listed on the Kosdaq, he directly or indirectly gets involved in the management of companies like Chorokbaem and IOK. The Seoul High Court on Oct. 8 acquitted Won on stock manipulation of Homecast. In a previous ruling by a lower court, Won received a two-year sentence. However, the higher court concluded that it was difficult to judge whether Won has participated in stock manipulation only with the evidence presented by the prosecution. The court concluded that Won was only an investor. However, three others charged for similar reasons were arrested, including the former largest-shareholder of Homecast, who was sentenced to one year in prison. There are rumors that Won was able to get acquitted because he has the money to hire star lawyers.