The headquarters of SK Square in central Seoul / Courtesy of SK Square
SK Square has suspended talks with Qoo10 over the sale of 11st Street, an e-commerce shopping website, as both sides have failed to agree on the online shopping platform's corporate value.
According to the investment banking industry, SK Square, the largest shareholder of 11st Street, recently notified Q0010 of the suspension of the M&A transaction.
Their talks began when 11st Street selected Q0010 as the preferred bidder of the deal at the end of September, granting it the right to conduct due diligence. The two companies pursued the merger of 11st Street and Q0010 for joint management but were unable to reach an agreement during the due diligence process.
If the talks between the two parties are confirmed to have failed, Qoo10's original blueprint to bring together Tmon, Interpark Commerce, Wemakeprice — online malls that Q0010 has so far acquired — as well as 11st Street will come to an end. Q0010 had envisioned market dominance by acquiring 11st Street, believing that the acquisition would allow them enough market influence to compete with Coupang.
Now, the market's attention is on SK Square's next move concerning the online shopping website's fate.
11st Street logo
Currently, local private equity firms — H&Q Korea and Aeneas Private Equity — have held a joint stake of 18.18 percent of 11st Street since 2018, while an 80.26 percent stake is held by SK Square and a 1.55 percent stake by 11st Street.
SK Square had earlier pledged an IPO of the online shopping website by September. However, with the IPO plan failing to follow through, the firm must repay the invested 500 billion won ($385 million) with an annual interest rate of 3.7 percent.
With the IPO plan failing to come through in September, financial investors of 11st Street now have the valid option to exercise drag-along rights, which enables them to force SK Square to join them in selling their stakes.
It remains to be seen whether negotiations will resume with other potential acquirers. Before selecting Q0010 as its preferred bidder in late September, 11th Street engaged in simultaneous negotiations with Amazon and Alibaba.
Some market watchers say the suspension of the deal with Q0010 could be a brinkmanship tactic employed by SK Square to earn an advantageous position in the deal.
![[INTERVIEW] Ex-NIS chief urges politicians to stop misusing spy agency](https://img.koreatimes.co.kr/upload/thumbnailV2/59da8df88faa4a50ad42945501b03bca.jpg/dims/resize/178/optimize)
![[REVIEW] Musical 'Monte Cristo' returns with riveting tale of vengeance, love](https://img.koreatimes.co.kr/upload/thumbnailV2/3934be1fa6844478b619a015d610bc5b.jpg/dims/resize/178/optimize)
![[INTERVIEW] Meet the man behind giant rubber ducks that once took over Seoul](https://img.koreatimes.co.kr/upload/thumbnailV2/df32c60c8204448e98ccdb9841366bec.jpg/dims/resize/178/optimize)
