By Park Hyong-ki
Two local private equity fund managers have been named the preferred bidders for Lotte Group's credit card and insurance companies, the group said Friday.
Hahn & Co. will continue to the next step and further negotiate to acquire Lotte Card. JKL Partners will do the same for Lotte Insurance, it said.
"Executives of the two financial subsidiaries have notified their employees that Hahn and JKL have been chosen as their preferred bidders," a Lotte Group spokesman said.
"Now they are preparing for the next step, which will be signing a share purchase agreement (SPA) and asking for approval on the deal from the Financial Services Commission."
The SPA would come after the two private equity fund managers further examine the books of Lotte Card and Lotte Insurance. Citigroup Global Markets is Lotte Group's broker for the deals.
Given the ongoing process, Lotte Group could not disclose the bids. But investment banking industry sources said it may cost Hahn 1.4 trillion won ($1.2 billion) for an 80 percent stake in Lotte Card. Lotte Group will retain 20 percent.
JKL Partners has bid 427 billion won for a 58.5 percent stake in Lotte Insurance, which is estimated to be valued at 730 billion won, industry sources said.
According to the two Lotte companies, the bidders offered "full employment of their existing workers and to increase investment" for growth.
The announcement came as a surprise as the market expected the bids, at least for Lotte Card, would end up in a race between Hana Financial Group and Woori Financial Group.
Hana Financial was committed to bid for Lotte Card to boost its non-bank business. The potential merger of Lotte Card and KEB Hana Card would have allowed Hana's credit card unit to catch up with top players such as Shinhan Card and Samsung Card.
Woori Financial reportedly entered a bid at the last minute, forming a consortium with Hahn's competitor MBK Partners, even though Woori had indicated it was not interested in credit cards, but rather in asset management and brokerages.
Last month, Woori Financial was chosen as the preferred bidder for two mid-tier asset management companies, Tongyang Asset Management and ABL Global Asset Management, formerly Allianz Asset Management.
JPMorgan was the lead manager for China-based Anbang Group, which owns the two local asset managers.
Hahn's portfolio includes SsangYong Cement and SK Encar. JKL's includes GDK Cosmetics and GS ITM, according to the two private equity funds.
Established in 2007, JKL is known for launching funds to invest in distressed companies that need immediate restructuring.
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| Lotte Card and Lotte Insurance in Seoul |
Two local private equity fund managers have been named the preferred bidders for Lotte Group's credit card and insurance companies, the group said Friday.
Hahn & Co. will continue to the next step and further negotiate to acquire Lotte Card. JKL Partners will do the same for Lotte Insurance, it said.
"Executives of the two financial subsidiaries have notified their employees that Hahn and JKL have been chosen as their preferred bidders," a Lotte Group spokesman said.
"Now they are preparing for the next step, which will be signing a share purchase agreement (SPA) and asking for approval on the deal from the Financial Services Commission."
The SPA would come after the two private equity fund managers further examine the books of Lotte Card and Lotte Insurance. Citigroup Global Markets is Lotte Group's broker for the deals.
Given the ongoing process, Lotte Group could not disclose the bids. But investment banking industry sources said it may cost Hahn 1.4 trillion won ($1.2 billion) for an 80 percent stake in Lotte Card. Lotte Group will retain 20 percent.
JKL Partners has bid 427 billion won for a 58.5 percent stake in Lotte Insurance, which is estimated to be valued at 730 billion won, industry sources said.
According to the two Lotte companies, the bidders offered "full employment of their existing workers and to increase investment" for growth.
The announcement came as a surprise as the market expected the bids, at least for Lotte Card, would end up in a race between Hana Financial Group and Woori Financial Group.
Hana Financial was committed to bid for Lotte Card to boost its non-bank business. The potential merger of Lotte Card and KEB Hana Card would have allowed Hana's credit card unit to catch up with top players such as Shinhan Card and Samsung Card.
Woori Financial reportedly entered a bid at the last minute, forming a consortium with Hahn's competitor MBK Partners, even though Woori had indicated it was not interested in credit cards, but rather in asset management and brokerages.
Last month, Woori Financial was chosen as the preferred bidder for two mid-tier asset management companies, Tongyang Asset Management and ABL Global Asset Management, formerly Allianz Asset Management.
JPMorgan was the lead manager for China-based Anbang Group, which owns the two local asset managers.
Hahn's portfolio includes SsangYong Cement and SK Encar. JKL's includes GDK Cosmetics and GS ITM, according to the two private equity funds.
Established in 2007, JKL is known for launching funds to invest in distressed companies that need immediate restructuring.
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