South Korea’s leading wireless carrier SK Telecom Co. reportedly has proposed to hand over its remaining stake in CJ Hello to LG Uplus Corp. which is awaiting administrative approval for its controlling stake acquisition in the nation’s largest cable TV operator.
SK Telecom became the second largest shareholder of CJ Hello in 2015 through purchase of a 8.61 percent stake or 6,671,933 shares at 80 billion won ($67.3 million), or 12,000 won apiece, with an eventual buyout goal. The deal, however, fell through in 2016 because the country’s antitrust agency denied the merger citing concerns for market dominance.
SK Telecom chose to merge its paid TV subsidiary SK Broadband with the nation’s No 2. cable TV operator T-broad, to stay in lucrative paid TV market. SK Broadband and Taekwang Group, the largest shareholder of T-broad, plan to complete the merger process by the end of this year.
LG Uplus, a distant third in wireless market, in February bought a 50 percent plus one share in CJ Hello from CJ ENM, the owner with a 53.92 percent stake, at 800 billion won. The deal has been under an antitrust review. The marriages are expected to pose a formidable threat to the industry leader KT and KT Skylife Group, which commands the local paid TV market with a 30.86 percent share.
Industry watchers believed that SK Telecom might have suggested that LG Uplus buy its 8.61 percent stake in CJ Hello to clear their entangled stake-holding relationship and to protect minor shareholders when CJ Hello stocks have been on the steady decline.
LG Uplus is expected to consider the suggestion after the deal gets administrative clearance.
Shares of CJ Hello closed Thursday up 0.73 percent at 8,250 won. Shares of SK Telecom remained unchanged at 258,000 won while LG Uplus dropped 0.96 percent to finish at 15,450 won.
By Lee Sun-hee and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]