Tuesday 29 Jul 2014

E-Land Group selling Kim’s Club Mart, 6% Market Share

Many strategic investors have been showing interest in the M&A of Kim’s Club Mart. The chief sales adviser, BNP Paribas, sent investment proposals to 20 parties, and more than 10 potential bidders have submitted confidential agreements. They have received information memoranda from BNP Paribas and are determining whether or not they will participate in the bid.

LOIs can be submitted till March 30. Most SSM (Super Supermarket) companies are interested, including Lotte Super, Homeplus Express, GS Supermarket, and Top Mart. These companies have 33 percent, 28 percent, 22 percent, and 9 percent in market shares, respectively.

Kim’s Mart has a market share of about 6 percent. Home Plus or GS could become the domestic No.1 if they successfully acquire Kim’s Mart. This sale is particularly interesting because organic growth in the SSM industry has slowed considerably over the last few years and there has been increased regulation regarding the locations of SSMs.

It is expected that the sale price will be around KRW 250 – 300 billion. E-Land Group, the owner of Kim’s Mart, wanted to sell to Homeplus, but Homeplus was only willing to pay KRW 240 billion. Homeplus’s low offer terminated the deal.

Update:

Six parties, including Lotte, Sinsegae and Home Plus, submitted LOIs to BNP Paribas for the acquisition of Kim’s Club Mart. Contrary to earlier predictions, GS Retail did not submit an LOI.

E-Land, the seller, will choose 2 to 3 potential bidders and disclose the names on April 5.

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