(Updated with additional information, stock prices)
Aekyung Group reinforced its chance against cash-rich rivaling group in a near $2 billion acquisition bid for full-service carrier Asiana Airlines by bringing Korea Investment & Securities Co. onboard before Thursday tender deadline.
This year’s hottest M&A deal in Korea led by Credit Suisse closed tender on Thursday with three participants confirmed after the due diligence – the Hyundai Development Co. (HDC)-Mirae Asset Daewoo consortium, Aekyung Group-Stone Bridge alliance and activist fund group of Korea Corporate Governance Improvement (KCGI) and Hong Kong-based BankerStreet Private Equity.
Of the three, Aekyung Group team has surfaced as a formidable bidder through surprise addition of Korea Investment with reputable fund-raising credentials.
Korea Investment & Securities had arranged the 1.5 trillion won financing alone for the purchase of top rental company Woongjing Coway by Woongjin Group.
The cash-rich HDC consortium still is a strong candidate. HDC has a cash hoard of over 1 trillion won and Mirae Asset Group Park Hyeon-joo is eager in joining aviation.
KCGI wants to command interests over the country’s two full-service carriers. The activist fund has pushed up its ownership to 16 percent to strengthen its influence over Hanjin KAL, the parent company of Korean Air Lines, as the second largest stakeholder.
Up for sale is a 31 percent controlling stake plus management rights through the handover of existing shares worth 400 billion won and issue of new shares worth 800 billion won in the country’s second largest full-service carrier.
When counting in the six subsidiaries including Air Busan, Air Seoul and Asiana IDT, the value could expand from 1.5 trillion won to 2 trillion won. Its creditors have threatened to find a buyer on their own, if the deal is not signed by the year-end.
On Thursday, Asiana Airlines shares closed 5.18 percent lower at 5,310 won. Shares of AK Holdings, the holding firm of Aekyung Group, finished the day 13.26 percent higher at 38,000 won, and Jeju Air 1.39 percent up at 25,450 won. HDC rose 2.76 percent to 33,500 won.
By Han Woo-ram and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]