Only two of six shortlisted bidders have submitted final offers for a 36% stake in Doosan Infracore, with the remaining investors delaying a firm commitment until the uncertainty is resolved over a lawsuit filed against subsidiary Doosan Infracore China Co (DICC).

Deal manager Credit Suisse received offers from a consortium of Hyundai Heavy Industries Holdings (HHI Holdings) and Korea Development Bank Investment and ready-mix concrete company Eugene Corporation during the second round of bidding for the stake, which was held on Tuesday (November 24), industry sources said.

Private equity firms MBK Partners, Glenwood Private Equity and EastBridge Partners, and a consortium of GS Engineering & Construction and Dominus Investment decided not to submit their binding offers. They are understood to be still interested in acquiring the heavy equipment maker, but have chosen to wait and see for now.

Potential buyers have been worried about the lawsuit filed against DICC, a subsidiary of Doosan Infracore. Doosan Group, which obtained a cash injection of 3 trillion won ($2.7 billion) from state-controlled lenders earlier this year after facing liquidity issues, made it clear that it would take care of all contingent liabilities related to DICC, but that was not enough to reassure bidders due to a lack of concrete plans.

The high price tag is another factor that made the company less desirable. The acquisition cost could be as high as 1 trillion won, given Doosan Infracore’s market capitalization of 1.9 trillion won and an estimated takeover premium of 300 billion won.

Doosan Group may need to sweeten the deal to bring investors back to the negotiating table, industry watchers said. It could enter into exclusive negotiations with the consortium led by HHI Holdings, one of the strong contenders in the bidding race, but antitrust scrutiny from the government could eventually derail any deal. Doosan Infracore and Hyundai Construction Equipment, a subsidiary of HHI Holdings, are the largest and the second largest players in the South Korean construction equipment market.

“The acquisition by HHI Holdings, if it is chosen by Doosan Group, would not be easy, considering antitrust issues and concerns about potential layoffs,” said an industry insider. “Because of that, some named GS Engineering & Construction as a better choice for the deal.”

GS Engineering & Construction is considered to be relatively free from an antitrust review. It also has a strong cash position, with nearly 2 trillion won of cash and cash equivalents at the end of June on a consolidated basis. (Reporting by Hye-ran Kim)