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[Alpha Biz=(Chicago) Reporter Kim Jisun] The market's interest is rising as the preferred bidder for the acquisition of HMM (Hyundai Merchant Marine's new name) is scheduled to be set next month.
Currently, while the HMM acquisition race has been compressed into a three-way race between Dongwon, Harim and LX Group, some worry that the acquisition price is too high and that factors such as prolonged high interest rates and a slump in the shipping industry could be variables in bidding.
According to the industrial and investment banking (IB) industries on the 16th, the sale of HMM, including the Korea Development Bank and the Korea Maritime Promotion Agency (Haejingong), have selected three bidding candidates: Dongwon Industrial, Harim and JK Partners Consortium and LX International. Samsung Securities, which is in charge of the sale of HMM, also provides bidders with data such as HMM's business plan, current status by business sector, and financial information, and is currently conducting management interviews with investors.
After about two months of due diligence, the sale, including the Korea Development Bank, will conduct final bidding in November to determine the preferred bidder for the acquisition of HMM by mid-November and sign a stock trading contract by the end of this year. The stocks to be sold totaled 399 million shares, including 199 million ordinary shares held by the Korea Development Bank and the Korea Maritime Promotion Agency and 200 million shares to be converted from permanent bonds to stocks.
Once Dongwon Industrial acquires HMM, it will be able to establish a distribution network from maritime transportation to port and land transportation along with Dongwon ROEX, a comprehensive logistics company, and Dongwon Busan Container Terminal, a port operator.
Harim and JKL Partners, who acquired Fan Ocean together in 2015, joined hands again this time to enter the HMM acquisition race. Harim expects that if it succeeds in acquiring HMM this time, it will be able to create synergy by adding container ship-oriented HMM to the bulk carrier's pan ocean. LX Group also says it needs to acquire HMM to expand its business.
However, the possibility of failure in bidding is steadily raised over the sale of HMM. With the sale price of HMM expected to be around 5 trillion ∼ 7 trillion won, it is virtually difficult for all three candidates to acquire HMM on their own. All three companies are forced to raise large-scale funds, with 2.5 trillion won in cashable assets for LX Group, 1.6 trillion won for Harim Group and 500 billion won for Dongwon Group.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
