citing his relationship with his fatherinlaw Park Tae Joon, the founder of POSCO and a

Seoul Sounds Alarm as Icahn Eyes KT&G South Koreans fear foreign hostile takeover Email Article Print Article Mingi Hyun (internews) For anyone familiar with Oliver Stone's clbuttic film "Wall Street" (1987), Gordon Gekko is a character as memorable (and ruthless) as Alec Baldwin was in "Glengarry Glen Ross" (1992). Gekko is known to have been modeled after a real life character, Carl Icahn, who has recently made headlines over his efforts to break up Time Warner. According to South Korean media reports, Icahn also has his eyes set on KT&G, the South Korean cigarette-maker which maintains a dominating domestic market share of 75 percent.

Icahn, along with Steel Partners' Warren Lichtenstein and others, reportedly own 6.6 percent of KT&G, and there is growing fear among South Koreans that Icahn will seek management control or even a hostile takeover of the company, which is known to be financially stable with growing share prices. Icahn has already demanded that he and Lichtenstein appoint three board members to the 12-member board at KT&G, in addition to demands that KT&G drop its ginseng and other non-core units.

In response, the Korea Center for International Finance, a government-funded think tank, released a report over the weekend trying to alleviate the recent alarm, insisting Icahn will not be seeking such control over KT&G, but merely trying to boost share prices. The report, however, did note that over 60 percent of KT&G shareholders are non-Korean. In turn, the company is expected to go on an overseas investor relations road show targeting foreign investors.

It also hired Goldman Sachs to seek advice on warding off Icahn and his entourage in case they try to tighten their grip on KT&G.

Surprisingly, local NGO's, who are usually sensitive towards major local business deals, have been rather silent about the recent developments surrounding the cigarette-maker. In what was a surprise to some, a number of NGO's in 2004 supported Sovereign buttet Management over SK, which ultimately failed as the South Korean elite marched away victorious with Chey Tae Won on their shoulders. However, the situation with KT&G appears rather different, and anyone with a reputation reminiscent of Gordon Gekko will most likely be unwelcome in Seoul and will hear about it from the likes of PSPD.

Rumors have also been circulating that the former head of the Carlyle Group in Asia, Michael Kim, will be looking to take KT&G off the stock market in part to help the KT&G management fend off Icahn. The ethnically Korean Kim, undoubtedly 'the' most well-connected foreigner in South Korea, currently heads MBK Partners, a buy-out firm he started last year reportedly with some of his most capable colleagues from Carlyle. Businessweek once tabbed Kim as "one of the best-connected figures in Seoul," citing his relationship with his father-in-law Park Tae Joon, the founder of POSCO and a former prime minister.

Kim's Carlyle background may raise eyebrows among many locals, especially considering his former employer's conspiracy-laden reputation. However, unlike Icahn, Kim may afford the support of some South Koreans, namely the elite, who have in recent years tried to boost locally based private equity funds as a means to combat foreigners orchestrating major deals in South Korea. Mingi Hyun is a journalist living in London, U.K. He previously worked for TIME Magazine in Seoul, and publishes a blog about Asian security issues and Korean politics.