SEOUL (Reuters) - U.S.-based Blackstone Group said on Tuesday it had agreed to acquire South Korean wholesale drug distributor Geo-Young in a deal with the company’s founder.

Blackstone did not disclose the value of its investment, but Maeil Business Newspaper said the private equity fund had agreed to buy a 46 percent stake in Geo-Young for 1.1 trillion won ($945.2 million) from another private equity firm.

Geo-Young founder and Chief Executive Cho Sun-hae would remain as a shareholder and retain her leadership role, Blackstone said in a statement.

The transaction was expected to close in the second quarter of 2019, subject to regulatory approvals, Blackstone added. </s> FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid

SEOUL (Reuters) - U.S.-based Blackstone Group said on Tuesday it had agreed to acquire South Korean wholesale drug distributor Geo-Young in a deal with the company’s founder.

Blackstone did not disclose the value of its investment, but Maeil Business Newspaper said the private equity fund had agreed to buy a 46 percent stake in Geo-Young for 1.1 trillion won ($945.2 million) from another private equity firm.

Geo-Young founder and Chief Executive Cho Sun-hae would remain as a shareholder and retain her leadership role, Blackstone said in a statement.

The transaction was expected to close in the second quarter of 2019, subject to regulatory approvals, Blackstone added. </s> (Adds HNA Airport Holding and Dynasty Financial Partners; Updates Ant Financial, Wal-Mart, Williams Partners and EagleClaw Midstream Ventures)

April 17 (Reuters) - The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Monday:

** China’s Ant Financial has sweetened its bid for MoneyGram International Inc by over a third, beating a rival offer to gain approval from the U.S. electronic payment firm’s board, although it still faces regulatory hurdles.

** Wal-Mart Stores Inc’s bid for clothing retailer Bonobos, which surfaced last week, is the latest step in the company’s attempt to recover lost ground against Amazon.com Inc and others in the rapidly growing online fashion world, analysts and retail consultants said.

** Apple Inc is considering teaming up with its supplier Foxconn to bid for Toshiba Corp’s semiconductor business, Japanese public broadcaster NHK reported on Friday - the latest twist in the sale of the world’s second-biggest flash memory chipmaker.

** Diversified healthcare company Abbott Laboratories on Friday agreed to buy Alere Inc at a lower price than it had previously offered, after raising concerns about the accuracy of various representations, warranties and covenants made by Alere in the earlier agreement.

** Chrysler Chief Executive Sergio Marchionne rowed back on his search for a merger on Friday, saying the car maker was not in a position to seek deals for now and would focus instead on following its business plan.

** U.S. video streaming service provider Netflix is in talks with Indonesia’s top telecom firm PT Telekomunikasi Indonesia Tbk (Telkom) to roll out its service in the country, a spokesman at the Indonesian company said.

** Williams Partners LP said it would sell its stake in a unit that owns 88.46 percent of an olefins plant in Louisiana to Nova Chemicals for $2.1 billion in cash, as part of the pipeline operator’s efforts to focus on natural gas.

** EagleClaw Midstream Ventures LLC, the largest privately held operator of pipelines and processing facilities in West Texas’ Delaware Basin, said it agreed to be bought by funds managed by Blackstone Group LP for about $2 billion.

** U.S. buyout firm Leonard Green & Partners LP has prevailed in an auction to acquire Charter NEX Films Inc, a U.S. manufacturer of specialty films for the food and medical industries, for $1.5 billion, including debt, people familiar with the matter said.

** China’s Anbang Insurance Group will let its agreement to acquire U.S. annuities and life insurer Fidelity & Guaranty Life for $1.6 billion lapse, after failing to secure all the necessary regulatory approvals, people familiar with the matter said on Sunday.

** German lighting company Osram is on the lookout for acquisitions worth up to 500 million euros ($530 million), although there are no specific plans for a deal as yet, its finance chief told a German newspaper.

** Malaysian property developer S P Setia Bhd said on Friday it will buy privately held rival I&P; Group for over 3.5 billion ringgit ($794.55 million) to create one of the country’s largest real estate firms.

** Taiwan’s Powertech Technology said on Friday it had bought two of Micron Technology’s interests in Japan in deals worth up to $132 million, part of its efforts to expand its presence in Japanese chip technology.

** Chinese stadium builder Lander Sports said late on Sunday it was terminating plans to buy a stake in English soccer club Southampton, citing uncertain factors wrought by changes in China’s securities market and policies.

** U.S. private equity group Carlyle Group has gained full control of Italian fashion brand TWINSET by buying the remaining 10 percent stake from founder Simona Barbieri, who will step down as the affordable luxury label’s creative director.

** HNA Airport Holding Group Co Ltd is close to buying out the stake that engineering conglomerate Odebrecht SA has in Brazil’s second-busiest international airport, a person briefed on the matter said, partly solving an impasse with a government agency over licensing rights.

** Dynasty Financial Partners LLC, which provides back-end support services to independent wealth management firms, said it had added Next Capital Management to its network of investment advisors. (Compiled by Ahmed Farhatha and Divya Grover in Bengaluru) </s> In a previous article I outlined the beginning of my new fund focusing on undervalued volatile dividend stocks that have lucrative option premiums, which allows us to collect income while waiting out any short-term headwinds in strong companies. You can find a link to that article here and the first update here.

The Blackstone Group (BX) is trading at $40.19 a share, approaching 2014 highs of around $42 a share. The surge has been driven recently by the announcement that Blackstone will be restructuring from a Limited Partnership to a Corporation.

Despite the recent jump in share price, the stocks remains at fair value, representing an excellent opportunity for long-term investors to reap the rewards from investing in a fast-growing private equity giant with world-class management, a rock solid balance sheet, and a current yield near 6% based on last year's distributions.

The Blackstone Group is a multinational private equity, asset management and financial services firm founded in 1985 by Peter George Peterson and (current CEO) Stephen A. Schwarzman. Blackstone currently manages funds that invest across four primary segments; private equity, real estate, hedge funds, and credit.

When we evaluate any company we do so using three main categories:

The most obvious near-term growth catalyst for Blackstone comes from the recent restructuring announcement mentioned above.

According to Blackstone’s management, this change is expected to take effect July 1st 2019, after which BX will switch from paying a distribution requiring a K-1 form to paying a qualified dividend. After this switch institutional ownership will likely soar from its low current level of 39.79%.

By Blackstone’s estimates, 60% of the U.S. long-only and index fund/ETF market is restricted from owning partnerships. The demand that will be created for BX after the change will be huge, as financial sector ETFs and index funds start buying up the stock. This doesn’t include the increased demand by individual investors driven by the relative simplicity of tax accounting for qualified dividends compared to K-1 distributions.

While the restructuring should provide a strong boost to BX’s share price over both the short and medium-term, Blackstone also has several growth opportunities across its business segments.

Blackstone reported 2019 Q1 earnings April 18th , reporting total revenue growth of around 14.5%, from $1.77 billion in Q1 2018 to $2.02 billion this year. For the 12 months preceding this quarter, Blackstone reported a 1% increase in revenue compared to last year. This is impressive given the market meltdown during the second half of last year that hurt Blackstone’s incentive fee revenue as well as revenue from investments.

Blackstone also experienced a 14% increase in Assets Under Management (AUM) to $511.8 billion, with inflows of $42.9 billion for the quarter and $125.7 billion for the year.

Fee Related Earnings margins have also been steadily climbing from the last two years, with a current margin of 46.1%.

Blackstone currently syndicates and manages funds related to its four investment strategies: real estate, private equity, hedge fund solutions and credit.

Blackstone’s 2019 investment performance was strong, will all segments except hedge fund solutions and distressed credit returning double digits.

The real estate and private equity segments represent the majority of capital inflows, with around $84 billion of the prior 12 month’s $125.7 billion total.

In January, Blackstone announced a new platform for investments in fast-growing, mid-stage companies in the health care and financial services industries. The platform is being led by Jon Korngold, a former General Atlantic executive with almost two decades of experience in growth equity investments primarily in the fin-tech and healthcare sectors.

The idea behind the strategy is to invest in companies that still have plenty of growth potential without the risk typically associated with earlier-stage investments.

In January, Blackstone also announced the initiation of the largest real estate fund ever raised, at $20 billion. Some stated opportunities for this fund have been investments in distribution centers used by online retailers, investments in rental housing or investments in properties within cities populated with younger tech-oriented populations. With typical real estate leverage of 3 to 1, Blackstone will likely control $60 billion worth of buying power in the market.

For an idea of the sheer buying power this represents, consider that the value of all residential housing in Mississippi is estimated at $100 billion.

Blackstone continues to find creative ways to invest across asset classes and sectors, which should continue to fuel capital inflows and revenue growth for the long term.

With a credit rating of A+ and a stable outlook, Blackstone currently has the highest credit rating of any alternative asset management company. Combined with recurring revenue from advisory fees and a diversified portfolio of investments across nearly all asset classes, Blackstone’s balance sheet is rock-solid.

From a valuation perspective, Blackstone is currently trading at around 15.5 times the high estimates for next year’s earnings. An ideal purchase price would be below $35, but it is unlikely that the shares retreat to this level anytime soon given the recent restructuring announcement.

As stated previously, Blackstone’s “dividend” current exists in the form of partnership distributions. These distributions change every quarter and can go up or down depending on the profitability of Blackstone during that time period. For 2018, Blackstone paid out $2.42 for the year, which would equate to a yield of around 6% based on today’s share price. While 2019’s distributions are expected to be down from 2018, over the last 10 years the CAGR has been 17.23%.

With private equity remaining in favor and Blackstone continuing to increase its AUM, the company should have plenty of ability to continue increasing the dividend going forward. Combined with Blackstone's predictable fee-based business model, steadily increasing AUM and A+ credit rating, Blackstone represents a high-yielding "sleep well at night" investment that should be seriously considered by any income investor.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. </s> (Updates Swift Transportation, Anglo American, AT&T;, Rent-A-Center, Eskom and Bain Capital; adds Maersk, Whole Foods, Stefanel, Banco and Xcerra)

April 10 (Reuters) - The following bids, mergers, acquisitions and disposals were reported by 1940 GMT on Monday:

** Activist investor Jana Partners LLC disclosed an 8.3 percent stake in Whole Foods Market Inc as it looks to shake up the company’s board, while pushing it to explore strategic options, including a potential sale.

** Two private equity funds that have agreed to take over loss-making Italian clothing company Stefanel plan to relaunch the brand and sell it within five years, a source at one of the funds said.

** Spain’s struggling Banco Popular is looking at a another capital hike to clean up a balance sheet weighed down by billions of euros in toxic assets and would consider a merger deal, its new chairman said.

** A unit of a large China-based semiconductor investment fund has agreed to acquire U.S. semiconductor testing company Xcerra Corp for $580 million in cash, the companies said.

** World No. 1 shipping company Maersk Line gained EU antitrust approval for its acquisition of Hamburg Sud after agreeing to pull the German company out from five consortia on trade routes to address competition concerns.

** AT&T; Inc said it would buy Straight Path Communications Inc, a holder of licenses to wireless spectrum, for $1.25 billion in an all-stock deal as it aims to accumulate the airwaves it needs for a next generation network.

** German food company Frosta said it was talking to KitKat maker Nestle about buying its Italian frozen food business.

** Malaysia’s Petronas has pitched an estimated $1 billion stake in a prized upstream local gas project to potential bidders including Royal Dutch Shell, ExxonMobil Corp , Thailand’s PTT Exploration and Production and Japanese firms, sources familiar with the matter said.

** Ski resorts operator Aspen Skiing Co LLC and private equity firm KSL Capital Partners LLC will buy Intrawest Resorts Holdings Inc for about $1.5 billion, including debt, Intrawest said.

** The pressure on Rent-A-Center Inc to auction itself increased after Marcato Capital joined fellow activist investor Engaged Capital to force the rent-to-own furniture retailer to pursue a sale rather than a “risky” turnaround plan.

** Trucking and logistics operators Swift Transportation Co and Knight Transportation Inc are merging in a stock-swap deal, creating a company with a market value of more than $5 billion.

** Buyout groups Bain Capital and Cinven won an auction for German drugmaker Stada on after a surprisingly large increase on a previous bid valued the company at about 5.3 billion euros ($5.6 billion).

** Turkey’s Vestel is in talks to buy the television unit of Japan’s Toshiba Corp, a Vestel official said, a deal that could be worth a few hundred million dollars and could expand the Turkish firm’s global presence.

** Anglo American will sell its Eskom-linked thermal coal operations in South Africa for $166 million, it said, marking an important step in the mining giant’s strategic overhaul to sharpen its focus on three commodities.

** China’s HNA Holding Group Co. said it would make an offer to acquire Singapore-listed logistics firm CWT Ltd for $1 billion.

** A consortium of investors led by Indian private equity fund True North has agreed to acquire Religare Enterprises Ltd’s health insurance business in the country, the groups said in a joint statement on Sunday. (Compiled by Komal Khettry and Laharee Chatterjee in Bengaluru) </s> (Adds Anthem, EDP, Televisa, Novo Banco, Frontline, Societe Generale, Schroders and National Aluminium; updates Virtu Financial)

April 20 (Reuters) - The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Thursday:

** Virtu Financial Inc said it would buy rival KCG Holdings Inc in a $1.4 billion deal that brings together two major players in the U.S. electronic trading space.

** Germany’s Beiersdorf, the maker of Nivea skin cream, still prefers hoarding cash to fund possible acquisitions over raising its dividend, supervisory board Chairman Reinhard Poellath told shareholders.

** Sanofi is looking at potential acquisitions of devices, such as blood glucose testing kits, to boost its diabetes business, a senior executive at the French drugmaker said.

** Western Digital Corp, the U.S. partner of Toshiba Corp in a semiconductor venture, is in talks with state-backed fund Innovation Network Corp of Japan and the Development Bank of Japan and would consider a joint bid with them for the chip business, a senior official said.

** The British government said it will sell the Green Investment Bank to a consortium led by Macquarie Bank in a deal worth 2.3 billion pounds ($3 billion), which critics said failed to guarantee its future.

** Japan’s Sawai Pharmaceutical Co Ltd is buying the generic drug business of U.S. drug maker Upsher-Smith Laboratories Inc for $1.05 billion, marking the Osaka-based generic drugmaker’s first overseas acquisition.

** Chinese tech conglomerate LeEco is in talks to sell a prized property asset in the heart of Beijing it acquired in a $420 million deal last year, the latest effort by the electric car-to-smartphone behemoth to raise funds amid a severe cash crunch.

** Belgian publisher Mediahuis and partner VP Exploitatie have launched a recommended cash offer for the Netherlands’ Telegraaf Media Group, the three parties said in a statement, as they try to build a Dutch-Belgian multimedia company.

** Mubadala Capital, an arm of Abu Dhabi’s state fund Mubadala, said it had conducted a private equity transaction with European fund manager Ardian, which had committed to invest $2.5 billion in the deal.

** German glasses retailer Fielmann could pursue takeovers in the future, marketing chief Marc Fielmann, the son of company founder Guenther Fielmann, told magazine Capital in an interview.

** Shares in Italian toll-road operator Atlantia extended losses in early afternoon following a downgrade by Deutsche Bank, which highlighted the risks of a possible combination with Spanish rival Abertis.

** Spain’s Banco Popular CEO Ignacio Sanchez-Asiain said the lender’s current priority is the sell off of non-performing real estate assets as it fights to return to profits and improve its capital.

** Brazilian police conducted raids on Wednesday as part of an investigation of state-controlled Caixa Econômica Federal’s purchase of a stake in a consumer lender six years ago, the latest scandal rocking the nation’s largest mortgage lender.

** India raised 12 billion rupees ($185.7 million) from a 9.2 percent stake sale in state-run National Aluminium Co (NALCO), the government said, kicking off its asset sale programme for the new financial year.

** British asset manager Schroders said it had agreed to buy Swiss-based private equity firm Adveq Holding for an undisclosed sum.

** Croatia’s competition regulator AZTN has approved the sale of Splitska Banka by Societe Generale to the local unit of Hungary’s OTP Group, increasing OTP’s market share in Croatia to over 10 percent.

** A U.S. court has rejected a last-minute effort by billionaire investor John Fredriksen’s Frontline to prevent BW Group from acquiring a major stake in rival oil tanker firm DHT Holdings, DHT said.

** A failed bidder for Portugal’s third-largest lender Novo Banco has asked its lawyers to block the 1 billion euro ($1.08 billion) sale to U.S. fund Lone Star and told the central bank it should relaunch the bidding.

** Health insurer Anthem Inc denied a report on Thursday that it was in negotiations with the Justice Department in an effort to save its merger with smaller rival Cigna Corp .

** Mexican broadcaster Televisa said it had signed a deal with Spanish telecoms giant Telefonica that would give the mobile operator’s customers cheaper access to the broadcaster’s content carried on its digital platform Blim.

** London hedge fund firm Ecofin said an offer from Portugal’s largest company EDP to buy 22.47 percent of subsidiary EDP Renovaveis “significantly undervalues” the company, in a letter to EDPR’s board seen by Reuters. (Compiled by Ahmed Farhatha and Divya Grover in Bengaluru) </s> The members of Trump's main business council discussed disbanding the group entirely according to multiple reports.

According to the New York Times' David Gelles, Landon Thomas Jr., and Kate Kelly, the members of the Strategic and Policy Forum held a phone call on Wednesday to discuss the future of the council and their relationship with the White House.

The discussion comes two days after the departure of Merck CEO Kenneth Frazier from Trump's manufacturing council, another one of the White House's meetings of business leaders, set off a wave of departures from that group. Frazier and other business leaders cited Trump's muddled response to the violence in Charlottesville, Virginia as the impetus for the exits.

The Strategic and Policy Forum features a diverse group of leaders including JPMorgan CEO Jamie Dimon, BlackRock CEO Larry Fink, General Motors CEO Mary Barra, and Walmart CEO Doug McMillon. Steve Schwarzman, CEO of private equity giant Blackstone, is the leader of the council.

According to the Times, even if the group did not disband, a number of executives said they would depart from the council.

Trump, for his part, attacked those executives who left the manufacturing council calling them "grandstanders" and saying they were "embarrassed" because they manufactured their products outside of the US.

The manufacturing council is expected to hold a similar phone call as the Strategic Forum's later on Wednesday. </s> SEOUL (Reuters) - The billionaire head of South Korea’s Samsung Group, Jay Y. Lee, was sentenced to five years in jail for bribery on Friday in a watershed for the country’s decades-long economic order dominated by powerful, family-run conglomerates.

After a six-month trial over a scandal that brought down the then president, Park Geun-hye, a court ruled that Lee had paid bribes in anticipation of favours from Park.

The court also found Lee guilty of hiding assets abroad, embezzlement and perjury.

Lee, the 49-year-old heir to one of the world’s biggest corporate empires, has been held since February on charges that he bribed Park to help secure control of a conglomerate that owns Samsung Electronics, the world’s leading smartphone and chip maker, and has interests ranging from drugs and home appliances to insurance and hotels.

Lee, who emerged stony-faced from the Seoul courtroom in a dark suit, but without a tie, and holding a document envelope, was escorted by justice ministry officials back to his detention centre.

“This case is a matter of Lee Jae-yong and Samsung Group executives, who had been steadily preparing for Lee’s succession ... bribing the president,” Seoul Central District Court Judge Kim Jin-dong said, using Lee’s Korean name.

Kim said that as the group’s heir apparent, Lee “stood to benefit the most” from any political favours for Samsung.

Lee denied wrongdoing, and one of his lawyers, Song Wu-cheol, said he would appeal.

“The entire guilty verdict is unacceptable,” Song said, adding he was confident his client’s innocence would be affirmed by a higher court. The case is expected to be appealed all the way up to the Supreme Court, likely next year.

The five year-sentence - one of the longest given to a South Korean business leader - is a landmark for South Korea, where the family-run conglomerates - or chaebols - have long been revered for helping transform the once war-ravaged country into a global economic powerhouse.

But they have more recently been criticized for holding back the economy and stifling small businesses and start-ups.

Samsung, a symbol of the country’s rise from poverty following the 1950-53 Korean War, has come to epitomize the cosy and sometimes corrupt ties between politicians and the chaebols.

“The ruling is a turning point for chaebols,” said Chang Sea-jin, a business professor at Korea Advanced Institute of Science and Technology. “In the past, chaebols weren’t afraid of laws because they were lenient. Now, Lee’s ruling sets a precedent for strict enforcement of laws, and chaebols should be wary.”

Under South Korean law, sentences of more than three years cannot be suspended.

LEADERSHIP VACUUM

The third-generation de facto head of the powerful Samsung Group, Lee has effectively directed operations since his father, Lee Kun-hee, was incapacitated by a heart attack in 2014. Some investors worry a prolonged leadership vacuum could slow decision-making at the group, which has more than five dozen affiliate companies and assets of 363.2 trillion won ($322.13 billion).

Its listed companies make up about 30 percent of the market value of South Korea’s KOSPI stock index.

Many tycoons, including Lee’s father, were convicted of crimes in the past, ranging from bribery, embezzlement and tax evasion, only to get presidential pardons, as both the government and the public feared going too hard on them would hurt the economy.

But South Korea’s new liberal president, Moon Jae-in, who won a May election, has pledged to rein in the chaebols, empower minority shareholders and end the practice of pardoning tycoons convicted of white-collar crime.

The presidential Blue House said in a statement that it hopes the ruling will serve as an opportunity to “end the nexus of business and politics that has held back the country.”

In a June interview with Reuters, Moon said he did not believe Samsung’s operations depended just on Lee.

“When Lee was taken into custody, the share prices of Samsung went up,” Moon said. “If we were to succeed in reforming the running of the chaebols and also increasing transparency, I believe this will not only help the economic power of Korea but also help to make the chaebols themselves more competitive.”

Lee Jae-yong, Samsung Group heir, leaves after his verdict trial at the Seoul Central District Court in Seoul, South Korea August 25, 2017. Lee was handed down 5 years jail sentence while prosecutors sought a 12-year in prison. REUTERS/Chung Sung-Jun/Pool

Investors say shares in chaebol companies trade at lower prices than they would otherwise because of their opaque corporate governance - the so-called Korea Discount.

Shares of Samsung Electronics dropped more than 1 percent, and other group companies, including Samsung C&T; and Samsung SDS, also turned lower after the verdict.

The court said Samsung’s financial support of entities backed by a friend of Park’s, Choi Soon-sil, constituted bribery, including 7.2 billion won ($6.4 million) in sponsoring the equestrian career of Choi’s daughter.

In return, prosecutors say, Samsung sought government support for the 2015 merger of two of its affiliates, which helped Lee tighten control of the conglomerate. His lawyers had argued that the merger was done for business reasons.

Some criminal lawyers had expected Lee to be found innocent of the major charges, as much of the evidence at the trial has been circumstantial. The appeals court and the Supreme Court might put a greater emphasis on prosecutors to provide direct proof of quid pro quo, the lawyers said.

PARK SUPPORTERS OUTRAGED

Park, who was forced from office in March, faces her own corruption trial, with a ruling expected later this year.

Prosecutors have argued that Park and Lee took part in the same act of bribery - so Lee’s conviction would appear ominous for the former president.

Hundreds of Park’s diehard supporters who rallied outside the court on Friday reacted with outrage to the ruling.

“Our ultimate goal is Park’s acquittal and release,” Kim Won-joon, a 62-year-old former construction worker said. “We worry how today’s guilty verdict for Lee would affect Park’s ruling.”

Such supporters are a minority compared with the huge crowds that turned out in Seoul every week to call for Park’s ouster after the bribery scandal surfaced late last year.

Public approval of Lee’s prosecution may underscore growing frustration in Asia’s fourth-largest economy that the wealth amassed by conglomerates has not trickled down.

Slideshow (4 Images)

“I think it was difficult for a court to ignore public opinion, given that the scandal rocked the country,” said Chung Sun-sup, chief executive of research firm Chaebul.com.

“The five-year sentence was low given that he was found guilty of all the charges. I think the court gave him a lighter sentence, taking into account Samsung’s importance to the economy.” </s> CHICAGO/SEOUL (Reuters) - Delta Air Lines bought a 4.3% stake in Korean Air Lines Co’s parent company and said it wants to raise it to 10%, giving a boost to the management of South Korea’s top carrier that seeks to thwart a local activist fund’s challenge.

Shares of the parent, Hanjin Kal Corp, slumped 8% on Friday, as Delta’s move dashed investor expectations of a battle to control the family-run group that has driven up shares since the death of patriarch Cho Yang-ho in April.

Korean Air, which has a joint venture with Delta, said on Friday that the stake buy intends to ensure the ‘stable management” of the company and support its leadership.

Should the No. 2 U.S. carrier raise its stake to 10% in Hanjin Kal, the airline’s founding family and its allies will have a total stake of 39%, versus the 16% stake held by the activist fund, Korea Corporate Governance Improvement (KCGI).

“Delta played a role as a white knight for Hanjin,” Choi Nam-gon, an analyst at Yuanta Securities, said, noting that the share purchase was done despite the sharp share price rises of Hanjin Kal in recent months.

“Now it would be impossible for KCGI to take control of the group. The stake buy removes the chance of a management battle at Hanjin Group,” he said.

Korean Air shares fell 3% and its budget affiliate Jin Air Co Ltd slipped 0.7% in the wider market that was down 0.2% as of 0202 GMT.

In April, the tycoon suddenly died at age 70, just weeks after shareholders decided to end his 27-year tenure on the airline’s board, in a show of growing shareholder activism in Asia’s fourth-biggest economy that has long been dominated by family-owned conglomerates.

The group subsequently appointed his only son Walter Cho, 43, as CEO and chairman, but the company has yet to inform regulators about a definitive succession plan. He and his two sisters have small stakes in Hanjin Kal, in which the late Cho has a 17.8% stake.

Against that backdrop, KCGI raised its stake to nearly 16%, fueling speculation about an impending ownership battle at the conglomerate.

KCGI did not have immediate comments on Delta’s stake buy.

Delta Chief Executive Ed Bastian said earlier this month he had “a lot of confidence” in Walter Cho, noting their friendship had gone back 20 years.

Korean Air has been plagued in recent years by a series of scandals involving its founding family members. Cho’s eldest daughter, Heather Cho, made headlines in 2014 when she lost her temper over the way she was served nuts in first class and ordered the Korean Air plane to return to its gate at a New York airport.

In April 2018, Cho’s youngest daughter Emily Cho faced a storm of public criticism for allegedly throwing a drink at a business meeting attendee.

Both resigned from their senior positions at the airline in the wake of the scandals. The younger Cho recently returned to the group as an executive at Hanjin Kal.

Delta’s stake buy comes as the U.S. airline is expanding across Asia. It has said it sees Seoul’s Incheon International Airport, the hub of Korean Air, as a gateway for more destinations across the continent.

It did not disclose how much it paid for the 4.3% stake, worth about $88 million as of Thursday’s price. It also did not say who it bought the stake from or when it may raise it to 10 percent.

The two firms formed a joint venture last year that includes 290 U.S. destinations and over 80 in Asia. Atlanta-based Delta is growing internationally both through joint ventures - which allow airlines to coordinate fares and schedules while building a presence in new markets - and direct equity investments, which help airlines align their respective strategies.

Delta also owns stakes in Grupo Aeromexico, Air France KLM, China Eastern, Brazil’s Gol and Virgin Atlantic, and has been negotiating a stake in Alitalia.

Shares in Delta closed down 0.7% at $55.97 in New York on Thursday.
The Blackstone Group, a multinational private equity and asset management firm, has agreed to buy Geo-Young, a wholesale drug distributor in South Korea, in a deal that will retain Geo-Young's CEO, Cho Sun-hae, in her leadership role.