[Photo by Lee Chung-woo]
IMM Private Equity (IMM PE) this week is expected to sign the final contract to buy Hanssem, South Korea’s largest furniture and home furnishing company for 1.45 trillion won ($1.2 billion), about 50 billion won lower than original offer, after a disruption from a foreign shareholder challenging the buyout.
IMM is said to be readying to ink a final stock agreement with Hanssem to take over a controlling stake of 37.8 percent in the company at 1.45 trillion won by the end of this week at the earliest, according to industry sources on Wednesday.
Both parties are said to have agreed on a 3 to 4 percent discount under the contract clause that allows up to 7.5 percent discount.
The exchange includes a 15.45 percent stake held by its founder and Honorary Chairman Cho Chang-geol and seven specially affiliated individuals.
The private equity firm has pulled in Lotte Shopping for the acquisition. The capital will finance the buyout with 300 billion won through its blind pool fund IMM Rosegold IV, 300 billion won from Lotte Shopping, and 800 billion won from acquisition loans.
IMM initially targeted to sign the contract with Hanssem by the end of September but the deal closing has been delayed due to price differences, according to sources. Teton Capital Partners, a U.S-based hedge fund with the second largest 8.43 percent stake in Hanssem, attempted to block the deal by lodging a court injunction to stop due diligence for the buyout deal. The industry watchers suspect the hedge fund’s action have had little impact on the deal as due diligence on the deal already ended before its intervention.
IMM bets big on Hanssem on expectation for strong growth in the country’s home décor market, which is expanding fast with people spending more time at home. Hanssem earned 2.07 trillion won in revenue last year, with sales from its “Re-House” home décor service surging 31.9 percent on year.
IMM will assist Hanssem on digital upgrade and global expansion. Hanssem is also expected to build synergy with IMM’s strategic partner Lotte Shopping, which has retail and construction affiliates under parent Lotte Group.
By Park Chang-young and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]