GS Retail divorces itself from Hi-Mart bid, others file CAs

GS Retail announced yesterday that it will not participate in the bidding for Hi-Mart. Meanwhile, Shinsegae, Lotte Group, Homeplus and two other private funds reportedly filed confidential agreements (CAs) with Citi Group Global Markets.

“The overseer of the bidding received CAs from the companies yesterday and letters of intent (LOI) at the end of the month,” an industrial official said. Lotte Group confirmed that it submitted the CA and said Lotte’s vast distribution network in the country will help strengthen the electronics appliance market.

An official from Homeplus anticipated synergy effects to be created by a combination of sales networks established by Hi-Mart and Homeplus.

GS Retail’s announcement has helped market observers draw a picture of the Hi-Mart bid. However, some industrial officials forecast that the bidders would have to accept certain risks triggered by the conflict between Hi-Mart and Eugene Group, the largest shareholder, over management last year. Others say there is a possibility Hi-Mart could be handed over to one of the private funds.