Hyosung Corporation is pushing ahead with the final round of bidding for financing arm Hyosung Capital after rejecting requests by potential bidders for more time, as it needs to meet a deadline to complete the sale by the end of December.
Bids were being accepted as planned on Friday (August 28), despite some shortlisted bidders wanting more time to complete due diligence, industry sources said on Wednesday (August 26). Hyosung Corporation is rushing to complete the sale to comply with regulations that forbid a non-financial holding company from owning a stake in a financial services company.
The initial round of bidding began in only mid-July, attracting strong interest from both domestic and offshore financial and strategic investors. Shortlisted bidders conducted due diligence in a virtual data room, made management presentations, and then entered into negotiations with the seller.
South Korean private equity firms, including ST Leaders Private Equity, reportedly plan to submit their final offers, but the consortium of BankerStreet and Keystone Private Equity has decided to pull out. Market insiders said the chances of White Whale Group submitting a final bid were also low.
Japanese financial services group ORIX is reportedly interested only in some of Hyosung Capital’s businesses, such as equipment leasing. This will make its bid less attractive, as Hyosung Corporation has to sell its entire stake in Hyosung Capital.
Interest levels by bidders have been low, making the sale outcome unpredictable. Whether a deal is struck will depend on Hyosung Corporation’s negotiations with other potential buyers, including foreign strategic investors.
It appears that only one potential foreign buyer remains in the race, after China’s Ping An International Financial Leasing failed to make the final shortlist due to its lower offer price in the first round.
The seller reportedly wants a valuation of more than 1.2 times Hyosung Capital’s net assets. (Reporting by Ar-rum Rho)