As South Korea's KOSPI index rises above 6000, there is growing optimism about the 'Korea Premium Era,' yet a significant portion of listed companies remain undervalued, with seven out of ten having a price-to-book ratio (PBR) below 1. To facilitate active mergers and acquisitions (M&A) in these undervalued companies, a proposal has emerged for mandatory disclosure by boards when receiving acquisition offers, ensuring they consider the interests of all shareholders, not just major shareholders. Former lawmaker Lee Yong-woo emphasized that this move aligns with last year's amendments to corporate law, which aim to enhance board responsibilities during M&A bids.

Lee pointed out that despite the positive trends in the South Korean stock market, where the overall PBR has increased beyond 1.7, the percentage of companies valued below the significant threshold of PBR 1 is 69%, with 40% falling below PBR 0.5. He argued that the presence of many undervalued firms is attributed to ineffective delisting practices, which allows poorly performing companies to persist. Moreover, during M&A transactions, premium payments on management rights often favor controlling shareholders while sidelining ordinary shareholders. This has led to a lack of legal pressure on boards to act on acquisition offers, further stifling attempts at M&A in undervalued firms.

In contrast to practices in advanced markets like the U.S. and Japan, where boards closely scrutinize acquisition offers from private equity or competitors to safeguard overall shareholder interests, South Korea needs similar reforms. Lee advocates that the regulatory framework must impose a strong duty of care on boards to actively manage and disclose M&A proposals, ensuring that the interests of all shareholders are prioritized, which could revitalize M&A activity and address undervaluation concerns in the market.