Shinsegae Co Ltd, GS Retail, and Lotte Group initially stated their intent to join the bidding however,  GS has since decided not to pursue the deal. The Reuters article also speculates that Hi-Mart may be attractive to private equity funds but they may have difficulty finding banks willing to finance the deal since it isn’t a 100 percent stake.

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Last year SK also started another JV with Sinopec to produce ethylene.

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The FT article mentions GS Engineering & Construction’s purchase of Spanish desalination company Inima, KT’s anticipated acquisition of a stake in South Africa’s Telkom, and Dongwon’s purchase of Spanish tuna canner Luis Calvo Sanz as potential collaborations. Other Korean companies such as Posco, Hanwha Group, and SK Group are also said to be involved in the NPS project.

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Samsung’s LCD business division had been facing an increasingly low profit, commoditised market. This move will allow them to move away from LCD to focus on OLED technology which is forecast to become a larger and larger part of the display market. The article also speculates that the new spinoff company may merge with Samsung’s mobile OLED manufacturer Samsung Mobile Display.

LCD display manufacturers are facing decreasing profit margins and increasing competition from low cost manufacturers. However, the OLED display market may grow to account for 16 percent of the total panel market, from an estimated 4 percent last year, according to display-market researcher DisplaySearch.

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According to Heo, the company is working with Sangrok Accounting Corporation and also has its own financial and legal advisors, which he didn’t name. He said it would be open to proposals from M&A advisors representing potential bidders  interested in investing in the company.

Heo said Media4th could consider a 100% sale. The valuation would depend on how talks unfold. Currently, Heo and the two other founders of Media4th are the major shareholders in the company, he said, with each holding an equal 33% stake.

The company was approached for a sale three years ago by a Singapore-based affiliate of WPP. China and Japan-based companies in the same field have also reached out to Media4th, said Heo. He noted that these suitors were likely only interested in Media4th for market research purposes, therefore he did not consider their offers seriously.

Separately, Heo noted that Media4th is in talks with two start-up companies, one an advertising company and the other in the social media space, for a stake investment.

Media4th previously specialized in website development, but is now focusing on advertising and mobile marketing. Its goal is to transform itself into an integrated marketing communication (IMC) service developer. Regarding an IPO, Heo said this is definitely part of the company’s long-term plans, but it would need to improve its business structure and sales before a listing could take place.

Heo has been the CEO of the company since 2004. He worked as a designer at the Samsung Industrial Design Center for three years before that.

Last year, Media4th generated sales of over 15 billion won. Heo said the company is aiming for sales of around 17 billion won this year. Its competitors are South Korea-based Megazone, e-motion and Vinyl.

by mergermarket reporter Eun Young Chough

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Lee led a team of researchers and engineers at KI-ITC to develop the e-book software over nearly three years, the professor said. The initiative was in line with South Korean government policies to digitalize textbooks by 2015.

E-readers can use various application functions such as page flipping, dog-earring and folding, while reading electronic books just like print books, according to the institute.

The Technology Commercialization Center of Kaist’s Office of University-Industry Cooperation (OUIC) is the lead advisor of the sale and transfer of technology.

The Office has received interest from IT companies in Brazil, Europe, Korea and the US, and has engaged in talks with some of them over acquisition prices. A source noted that negotiations are expected to take some time due to issues concerning intellectual property rights.

The source declined to comment on a valuation. However, he said that there is an immense growth opportunity given that the global e-book market is expected to reach the scale of billions of dollars by 2015, fuelled by the increasing popularity of smart devices.

The US is the biggest market where e-books are already being mass marketed to consumers, he added, noting a PwC report. PwC forecasted that the value of the global e-book market will grow to about $10 billion by 2013, up from $3.5 billion in 2010.

Samsung Electronics, LG Electronics and Kyobo Book Center are among the Korean companies that could be interested in acquiring KI-ITC’s software for their smart devices, two industry sources and a banker suggested. Kyobo Book Center, the country’s biggest bookstore operator, is the most active e-book player in Korea, one of the industry sources noted.

A Samsung Electronics spokesperson declined comment. Kyobo Book Center did not return calls for comment.

A spokesperson for LG Electronics said that its top priority is its smart phone hardware business, followed by fully opened Android-based tablet PCs, adding that it can support such software for its hardware products.

OUIC posted profits of 11.5 billion won last year from selling its stakes in start-ups and technologies, including the sale of its electric vehicle design to Dongwon Group for 5.2 billion won.

by mergermarket reporter H. Park

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SK Innovation, owner of Korea’s largest oil refiner and with business interests in batteries and fossil fuel exploration and development, has reportedly been discussing the acquisition with Chaparral since October and plans to complete it as early as March 31. The Fox article states that SK is also considering other targets for acquisition as well.

This acquisition is part of a trend by Korean energy companies attempting to secure overseas resources in order to increase supply.

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 Aimed at domestic asset management companies, the National Pension Service’s first international investment fund, the “Pan-Asia Fund” is ready to begin operation. The fund was established with 8 private equity and venture capital funds as GPs, and is expected to commence investing its 2 trillion won in committed funds this year.

For the NPS, the Pan-Asia Fund was an inevitable choice. Investing the NPS’s more than 350 trillion won in assets is difficult to do domestically. NPS president, Jeon Gwangwoo has also emphasized that, “a whale cannot live in a pond forever” However; some are asking if proper international investment will is possible.

With the exception of MBK Partners, none of the selected GPs have a track record in international investments. There are funds like Softbank Venture and SBI which are owned by foreign companies but they are not considered proven enough for a blind investment fund. It is difficult to find domestic alternatives to these funds which do not even have overseas branch offices.

In reality, most of the managers seem more focused on domestic rather than international investments. Due to deal sourcing problems or hasty foreign investments, the fund could experience losses. From the perspective of the fund managers, losing the confidence of the NPS would make it difficult to raise funds later.

This is the main difference between this and NPS’s other fund focusing on international investments, the Corporate Partnership (COPA) Fund. Because COPA co-invests into targets pre-selected by Korean corporates, there is less risk and deal sourcing burden for the GP.

Unfortunately, the amount of foreign investment the Pan-Asia fund can make is also restricted to 45 percent of the fund. NPS has limited the amount of foreign investments the fund is allowed to make. It makes little sense for it to be technically possible for something called the ‘Pan Asia Fund” to make 100 percent of its investments domestically.

Industry insiders are of the opinion that the rule was created as a safety device to avoid low returns, rather than out of consideration for the GPs. Government auditors need to be sufficiently prepared for low returns or even losses. For this reason the Korea Finance Corporation emphasizes high returns.

The other limited partners also seem to tacitly support domestic investments. While the NPS is the anchor investor in the fund, there are also other LPs. According to a source related to one of the fund managers, some of the LPs requested not to “invest too much overseas.” Naturally these parties also wish to avoid foreign investments because of uncertain returns. By pursuing the mission of overseas investment while obsessing over the practical consideration of profits, the National Pension Service is trying to have their cake and eat it too. It will not be easy for them to accomplish both goals.

One venture capitalist said, “It feels like they are saying, we will give you the chance to invest abroad but you better not lose any money.” “In the end, this might result in an insignificant amount of foreign investment” he pointed out.

 

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The official bidding for a 50% stake in GS Caltex subsidiary, GS Power is set to begin on February 17. According to this Korea Times article,  four local and international bidders including a consortium composed of Kookmin Bank and Samsung Life Insurance as well as Macquarie Private Equity Fund.

After the sale was announced in October, roughly 10 companies showed interest, however several of the overseas strategic investors dropped out, possibly due to the fact that GS Caltex will retain management control over the company.

The stake is expected to sell for 400 to 500 billion won, more than four times the book value of 95.43 billion won. In 2010, GS Power had sales of 738.1 billion won and EBITDA of 147 billion won.

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Maeil Kyungjae got ahold of Goldman Sach’s request for proposal (RFP) which contains the firms best guesses for what types of companies will enter the bidding for Coway, According to the report, Coway’s status as Korea’s number one business in the home environment products industry, its original and powerful business model, and high entry barriers make it an attractive acquisition.

The Goldman Sachs RFP divided the potential buyers into domestic and international strategic investors and international private equity funds. Domestic companies like LG Electronics, GS, Lotte, KT&G, LS, Hanhwa, Yakult, Shinsegye and CJ were named as possible bidders. In particular, those that target women between 30 to 50 are expected to be attracted to the sale.

International companies interested in the B2C model or those moving into areas such as water purification, bidets, water softeners, and air purifiers were also mentioned in the RFP. In particular Goldman Sachs mentioned 3M, Electrolux, Koehler, Phillips, Whirlpool, and P&G as potential bidders.

As for private equity investors, the RFP mentions global players like KKR, Blackstone, and Carlyle as well as domestic investors like MBK Partners, Woori Private Equity, and Hahn and Company.

However, due to the recent scandals regarding large corporations entering business areas traditionally occupied by SMEs, companies like LG or CJ might face criticism for the acquisition. Because of this, the article concludes that an international private equity investor may be a more likely suitor.

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