Hyundai Securities bidding ends

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Hyundai Securities bidding ends

KB Financial Group, Korea Investment Holdings and one private equity fund placed bids for a controlling stake in Hyundai Securities in the auction that closed Friday.

The private equity fund is Actis of Hong Kong. Three other funds, including one Korean fund, were known to be interested in the deal but dropped out at the last minute.

Since Korea’s top asset manager, Mirae Asset, announced on Wednesday it would pull out of the bid, speculators said the high-profile takeover deal is highly likely to center around KB Financial Group and Korea Investment Holdings, which have more money to spend than the funds.

Both KB and Korea Investment already operate their own brokerages but are vying for Hyundai to diversify their businesses and expand their corporate assets after losing in the bid for Daewoo Securities late last year. Mirae Asset won in the Daewoo deal.

After acquiring Daewoo, Mirae became Korea’s top brokerage by equity capital. Other brokerages expressed concerns that Mirae’s acquisition of Hyundai Securities would give it too much power in the local market.

Hyundai Group, the largest shareholder of the brokerage, put up 22.56 percent of the brokerage’s shares, worth 300 billion won ($257 million), for sale on Feb. 3, seeking cash to rescue its flagship affiliate Hyundai Merchant Marine, which is seriously short of liquidity.

Of that 22.56 percent, 22.43 percent is currently owned by the troubled shipper. The remaining 0.13 percent belongs to the group’s chairwoman, Hyun Jeong-eun, and other owner family members.

Although Hyundai Securities is worth an estimated 350 billion won, the final bidding price is speculated at between 500 and 800 billion won when the premiums paid to management is added. The exact bids will be disclosed on Monday, and the deal’s adviser, EY Han Young, will pick the preferred bidder the following day.

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