South Korean content distribution company JTBC Studios, which is seeking to receive outside funding, and its sale manager Morgan Stanley have shortlisted five domestic and foreign private equity (PE) firms, industry sources said on August 25.

JKL Partners, SG PE, Praxis Capital Partners are among the domestic shortlisted contenders. SG PE and Praxis Capital Partners created a 500 billion-won ($421 million) blind-pool fund respectively earlier this year and JKL Partners is currently forming an 800 billion-won blind-pool fund. Foreign PE firms that made the shortlist include TPG Capital and Bain Capital.

Strategic investors at home and abroad chose not to participate in the deal. Previously, industry insiders paid attention to the country’s internet giant Naver, which received an information memorandum from the content distribution company. Naver was considered one of the strongest potential investors as it could create synergies with JTBC Studios but it decided to pull out at the last minute, making the deal a competition among financial investors only.

Morgan Stanley plans to allow shortlisted bidders to conduct due diligence in a virtual data room soon, followed by a management presentation process. It is likely to hold a final round of bidding in October. JTBC Studios seems to have allocated plenty of time for the due diligence process as it has multiple content firms under its umbrella.

JTBC Studios owns drama production companies such as Drama House, ZIUM Content and nPIO. The company grew in size last year by making a series of acquisitions including BA Entertainment, Perfect Storm and How Pictures. It also has Studio Lululala, JTBC Studios’ digital contents production company, which has produced several mega hits including ‘Workman’ and ‘Wassup Man’. JTBC Studios is likely to merge with J Contentree Studio.

Shortlisted bidders will propose a valuation of the company along with their preferred investment amount in the final round of bidding. Giving potential buyers greater autonomy in preparing their proposals is likely to intensify competition. (Reporting by Se-hun Jo)