Lotte Group chose a consortium of MBK Partners and Woori Bank its new exclusive candidate to sell its credit card unit after failing to strike a deal with earlier choice, Hahn & Co. within the deadline.

Lotte Corp., the holding entity of the South Korea’s fifth largest conglomerate, announced in a disclosure Tuesday that it named MBK Partners a new preferred buyer for Lotte Card, as it failed to end the deal with its original preferred bidder Hahn & Co. within the exclusive bargaining period that had expired on May 13.

Sources from the investment banking industry suggested Lotte settled for slightly lowered offering from MBK Partners in a consortium with Woori Bank as it is in a rush to complete the deals by October to meet the country’s non-financial holding structure guidelines under the fair trade law.

Lotte was expected to turn to other options that included Hana Financial Group and the MBK Partners-Woori Bank consortium after the exclusive period expired with Hahn & Co. which has lately come under legal issues.

Lotte Group and its lead manager Citigroup Global Markets on May 3 chose two local private equity funds, Hahn & Co. and JKL Partners, as the preferential candidates to assume its two respective financial affiliates Lotte Card and Lotte Non-Life Insurance Co.

It was reported that Hahn & Co. offered the highest bid of 1.44 trillion won for an 80 percent stake in Lotte Card. The retail conglomerate plans to retain an around 20 percent stake to keep the credit card unit’s partnership with other Lotte units. For a 52.47 percent stake in Lotte Non-Life Insurance, JKL Partners reportedly proposed 390 billion won.

By Chung Seok-hwan and Choi Mira

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