Bank of America Merrill Lynch (BAML) has been appointed to lead a sale of D’Live, a South Korean cable TV operator, which could speed up the sale process that has been at a standstill for years.
Creditors of D’Live, including Shinhan Bank and Hana Bank, have hired BAML to restart the sale of the cable TV company. The law firm Kim & Chang will act as legal adviser.
A group of lenders to D’Live sent a request for proposal about a month ago to four foreign investment banks that have a track record in advising on deals in the cable TV sector, and gave the mandate to BAML last week to lead the sale.
D’Live was initially put up for sale a few years ago, while its peer Hyundai HCN was also put on the market recently. The sale process for Hyundai HCN is expected to play a role in the sale of D’Live, and vice versa. The first round of bidding for Hyundai HCN will take place later this month.
Some private equity firms may express interest in investing in these companies, but the Big Three mobile carriers – KT, SK Telecom and LG Uplus – are considered as major prospective buyers in the domestic pay TV sector. This means chances are high that D’Live and Hyundai HCN will lay out a competitive marketing strategy to show their attraction to a limited number of potential buyers.
Hyundai HCN offers its cable services to regional cities as well as the Seoul metropolitan area, while D’Live’s business territory is limited to Seoul and Gyeonggi Province. That’s why potential buyers for D’Live – including KT which already conducted due diligence last year in an attempt to acquire the company – have reportedly focused their attention not only to the number of subscribers, but also to its competitive edge in the metropolitan pay TV market.
Investors will likely show a different response to D’Live compared to its latest attempt to sell itself in 2017 with Samil PwC as lead manager, industry watchers said, because the seller reportedly lowered a target valuation for the company from more than one trillion won to around 900 billion won.
Lenders to D’Live also agreed last year to convert one trillion won in debt provided to Kookmin Cable Investment (KCI) – the largest shareholder in the cable TV company – into equity. This contributed to easing pressure on the company’s financial position. They reportedly started a review to change lead manager for the sale of the company before Hyundai HCN was put up for sale. (By reporter Rho Ar-rum)