South Korea’s JC Partners has joined a race with two other bidders to buy KDB Life Insurance, though whether the firm will actually bid for the insurance company depends on the results of preliminary due diligence.
The Seoul-based firm recently received access to a virtual data room (VDR) to commence due diligence on KDB Life Insurance, which state-run Korea Development Bank (KDB) put up for sale last year, sources close to the matter said on March 12.
KDB initially planned to sell the company by the end of last year, but the timeline for the sale ended up being postponed due to lukewarm investor interest. It was also partly because of Prudential Life Insurance, which surprised the market when it was put up for sale last December. As such, industry insiders were skeptical of a successful sale of KDB Life Insurance. But, with JC Partner joining other bidders, hopes are up that there could be a change in atmosphere.
Previously, KDB and its counsels – Credit Suisse and Samil PricewaterhouseCoopers – shortlisted two PE firms in the preliminary tender last December. They have since continued their marketing efforts toward other potential strategic and financial investors, hoping to increase the odds of a deal being signed. Such efforts seem to have borne fruit as JC Partners has expressed the intent to bid for the company.
It is difficult to predict how much a deal would be worth at this point, because, along with the sale of KDB’s existing stake in KDB Life Insurance, the deal would also likely entail an issue of fresh shares by the company to boost its capital. Deloitte Anjin is reportedly acting as financial advisor to JC Partners.
Still, many have doubts about whether KDB Life Insurance – which was acquired by a consortium of KDB and Consus Asset Management about ten years ago – would be able to find the new owner, given previous attempts at selling the company have all failed. Industry watchers say they need to wait and see how the situation plays out. KDB does not seem in a hurry to move to the next stage of the sale process, giving sufficient time to bidders to conduct due diligence.
“JC Partners, which is currently going through a regulatory process to become the largest shareholder in MG Non-life Insurance, is one of the PE firms that have great knowledge in the insurance industry,” an industry insider said. “But I think we need to wait and see how the situation evolves.” (By reporter Rho Ar-rum)