SK Telecom to become owner of Hynix

Creditors of Hynix Semiconductor chose the country’s leading mobile carrier, SK Telecom, as the preferred bidder for a major stake in the world’s second-largest memory chip maker, paving the way for its long-pending sale.

Hynix’s main creditor, Korea Exchange Bank, and others are seeking to sell half of their 15 percent in the chip maker plus new shares.

“SK Telecom offered a price higher than the minimum set by the creditors and was selected as the preferred bidder,” KEB said in a statement, without disclosing the minimum price limit. Creditors intend to wrap up the sale by the first half of next year.

SK Telecom was the sole bidder as the bidding closed on Thursday for the 146.1 million shares valued at around 3.2 trillion won ($2.8 billion). A total of 44.25 million shares owned by creditors as well as 101.85 million new shares are up for sale.

As the preferred bidder, SK Telecom would have to purchase a stake of 20 percent or more in Hynix.

Under a local fair trade law, a holding company’s subsidiary is requested to buy a minimum 20 percent interest in the firm it invests in. SK Telecom is part of the country’s third largest conglomerate SK Group.

Meanwhile, analysts say SK Telecom’s acquisition of Hynix is bad for its stock price temporarily due to uncertainty over the merger and the chip maker’s profitability.

SK Telecom said earlier it would be able to finance the merger through its cash holdings and new loans. The company has 2.1 trillion won in cash, cash equivalents and trading securities.

It also said it has no plan for capital increase or selling its assets to raise capital.

“The acquisition is seen as an effort to find a growth engine but it would inevitably affect SK Telecom’s stock price negatively,” said Kang Ji-hun, an analyst at Samsung Securities.

“The effect of synergy in the mid-to-long-term is uncertain. If it borrows money from outside, its dividend payout can be reduced,” Kang added.

“There is a high chance that SK’s share price would decline temporarily but it is already reflected in the market and additional decrease is limited,” said Choi Ji-hu, an analyst at Daewoo Securities.

By Limb Jae-un [jbiz91@joongang.co.kr]