Kyobo Life IPO Faces Put Option Dilemma as FIs Seek Market-Based Valuation

This article was first published on Signal, Seoul Economic Daily's capital markets newsletter, at 15:08 on March 16, 2026.

Private equity firms IMM Private Equity and EQT Partners, financial investors (FIs) in Kyobo Life Insurance, are reviewing a plan to revalue their put options based on the company's initial public offering price. The proposal aims to enable Kyobo Life's transition to a holding company structure following the IPO while simultaneously settling the put option obligations.

For Kyobo Life Chairman Shin Chang-jae, this creates a dilemma: a higher IPO price would increase the amount owed to the FIs, while a lower offering price would reduce the insurer's market valuation.

According to investment banking sources on March 16, IMM PE and EQT Partners are examining the option of revaluing their put options based on the IPO offering price. The firms are expected to appoint advisors to review financial and legal conditions before proposing a recalculation of the put option value to Kyobo Life.

"This proposal emerged as both sides continue to disagree over the investment repayment terms," an IB industry source said.

The FIs reportedly began exploring this approach after Chairman Shin's side argued that the current put option valuation is excessive. IMM PE and EQT each hold 5.23% stakes in Kyobo Life, totaling 10.46%. The investors are seeking a recovery price of at least 300,000 won per share, factoring in principal and opportunity costs. Chairman Shin's side maintains that this price calculation is flawed.

The FIs' rationale is to let the market determine the per-share value through the IPO process, providing an objective price assessment. IPO valuations typically multiply the listing company's net profit by the average price-to-earnings ratio of comparable firms, then apply a discount rate.

Whether Chairman Shin's side will accept this approach remains uncertain. A high offering price would benefit Kyobo Life's corporate valuation but increase the put option payout. Conversely, a low offering price would reduce the put option obligation but shrink the company's market capitalization.

Kyobo Life reportedly plans to convert to a holding company structure after completing its IPO. The strategy involves diversifying beyond life insurance through property insurance acquisitions and strengthening securities and asset management operations. The company previously pursued an IPO but failed the preliminary listing review in 2022 due to governance instability concerns.

The IPO process is expected to accelerate following last month's appellate court ruling that overturned a lower court decision. The earlier ruling had invalidated a daily penalty of $200,000 (approximately 290 million won) imposed on Chairman Shin through an International Chamber of Commerce arbitration decision. While the penalty is not immediately enforceable, analysts note the ruling has narrowed Chairman Shin's room for maneuvering in future arbitration and Supreme Court proceedings.

The dispute between the FIs and Chairman Shin dates to 2012, when the Affinity Consortium acquired a 24% stake in Kyobo Life at 245,000 won per share. The contract reportedly included a put option clause allowing the FIs to sell their shares back to Chairman Shin if an IPO was not completed by September 2015. Affinity later exited successfully by selling its stake to SBI Holdings, a Kyobo Life-friendly party.

"The standard for resolving the put option dispute is a reasonable market-determined price. Affinity and GIC exited in the market at 234,000 won per share," a Kyobo Life spokesperson said. "Whether to pursue a listing has not yet been finalized."