SK Telecom has decided to delay the final round of bidding for its subsidiary T Map Mobility, as potential buyers have requested more time to look into the company.
The South Korean telco recently notified bidders interested in acquiring a minority stake in T Map Mobility that the final round had been postponed for a week from Thursday (February 25) to March 4, industry sources said.
The shortlisted bidders, including private equity firms Affirma Capital and Eastbridge Partners, have been conducting due diligence since the middle of January. But they demanded more time to evaluate the company’s strategies and growth potential as it was launched only recently.
T Map Mobility was spun off from SK Telecom in December as part of efforts by the telco to expand its platform services in the fast-growing mobility market.
SK Telecom and U.S. ride-hailing giant Uber announced a joint venture last October, which is expected to be operational in April. Uber agreed to put $100 million into the joint venture and $50 million into T Map Mobility in a deal that valued the mobility unit at one trillion won ($899.4 million).
T Map Mobility specifically asked the bidders to use this valuation as a reference, which means there is little room for price negotiation. To offset this disadvantage, the bidders have been working hard on due diligence to add terms beneficial to them, sources said.
The company is relying on the growth potential of the mobility business to attract investors, and expects its value to grow to 4.5 trillion won by 2025.
Its popular navigation app T Map, combined with a taxi-hailing joint venture with Uber, may help convince investors that the company will be able to become the dominant player in the overall mobility market.
But potential buyers still have doubts over whether T Map Mobility can cause market disruption, as rival Kakao Mobility already has a solid lead in areas like taxi-hailing and connected parking services, industry watchers said. (Reporting by Hee-yeon Han)