SK Telecom is attracting keen attention from market insiders with the nation’s largest mobile carrier emerging as the strongest candidate to acquire Hyundai HCN.
South Korea’s “big three” mobile carriers – SK Telecom, KT and LG Uplus – have been conducting due diligence via a virtual data room on Hyundai HCN since June 4, according to sources. On the previous day, Hyundai Department Store Group included all bidders who submitted letters of intent in the first round of bidding in its shortlist.
Shortlisted bidders will prepare for the final round of bidding by exploring Hyundai HCN in more detail. They will hire firms that will act as legal and financial advisors and draw up a funding plan with financial firms to use acquisition financing.
As all of the big three mobile carriers are included in the shortlist, domestic financial firms are moving fast to be hired by a candidate with the strongest will to finish and win the race.
Market insiders widely consider SK Telecom the strongest candidate. More than 10 domestic financial firms have reportedly contacted the mobile carrier to provide acquisition financing.
SK Telecom is not in a hurry to secure funds to acquire Hyundai HCN. The mobile carrier can use money it owns and easily raise money by selling corporate bonds, given its AAA credit ratings. But domestic financial firms are flocking to SK Telecom hoping to be hired by the mobile carrier and provide bridge loans.
The financial firms may choose to contact other candidates simultaneously but it is unlikely considering credibility may emerge as an issue. SK Telecom is in a position where it can make a funding plan on relatively favorable conditions.
There was a rumor going around the market that the seller had a specific buyer in mind from the marketing stage, even before the public auction has begun in earnest. This has made market insiders pay attention to whether Hyundai HCN will be sold through a negotiated deal or a public auction. The company will be sold through the public auction but the rumor is still lingering. (Reporting by Hee-yeon Han)