Two South Korean cable TV operators have returned to the sale block to set off another wave of consolidation in the country’s pay TV market.

Owners and creditors of D’Live, Korea’s fourth-largest cable TV operator, have started tapping foreign investment banks for the task of overseeing the sale, according to investment banking sources on Thursday.

Local brokerages and accounting firms have not been invited. D’Live is aiming to name the advisory firm within the next couple of weeks, the sources said.

This would be D’Live’s third return to the M&A market. Local private equity firm MBK Partners and Macquarie Korea Opportunities Management had bought D’Live in 2007 for 2.2 trillion won ($1.79 billion), with 1.4 trillion won in acquisition financing. Previous sale attempts managed by Goldman Sachs in 2015 and by Samil PwC in 2017 failed to go through.

This time, the sale will be led by the creditor team that financed the acquisition including Shinhan Bank and Hana Bank. Last year, they extended loans of 1 trillion won to D’Live owners in exchange for 30-year bonds and waived annual interest of 40 billion won to help lessen their financial burden.

Hyundai HCN, the No. 5 player, has already assigned Credit Suisse to manage the sale. Earlier this week, its parent Hyundai Department Store announced it would spin off Hyundai HCN into a standalone company and pursue a stake sale.

D’Live and Hyundai HCN held a market share of 6.09 percent and 4.07 percent, respectively, in Korea’s pay TV market as of late June 2019, according to the Ministry of Science and ICT. This puts them far behind the Big Three, led by KT with 31.31 percent, LG Uplus with 24.72 percent and SK Broadband with 24.03 percent. Grabbing any one of these companies could change their market ranks.

KT has its eyes on D’Live. It took part in due diligence of the company last year as part of its acquisition review but was unable to see it through due to uncertain local regulations.

Under previous Korean pay TV monopoly laws, the combined share of one group’s affiliates could not exceed one-third of the entire market. While the law was expired in June 2018, KT was afraid to act as there were legislative talks of renewing the rule. A bill currently pending in parliament does not include the one-third market share rule but other measures to toughen regulations on market monopoly.

LG Uplus acquired the former top cable TV operator CJ Hello to jump to No. 2 in the country’s pay TV market. SK Broadband followed by buying t-broad, Korea’s second-largest cable TV player.

By Kang Woo-seok, Park Jae-young and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]