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Kyobo Book Centre, South Korea’s largest bookstore chain, may consider acquiring Interpark Songin Books as it seeks to generate synergies for gaining a foothold in the book wholesale market.

The bookstore chain is being named as one of the prospective buyers for Interpark Songin Books which was up for sale last year, sources said on June 2. This coincides with its latest move to enter the book distribution market.

Interpark Songin Books, founded in 1959, is the second-largest book wholesale company in the country, followed by dominant rival Booxen with a market share of 65 percent. In December 2017 online retail giant Interpark Corp acquired the company which was then suffering from financial difficulties. But its financial performance has since hardly improved, recording operating losses for the past three years.

Nonetheless, Interpark Songin Books’ solid market position as the country’s second-largest book wholesaler and symbolic meaning in the publishing industry could attract investors, industry watchers said. The estimated value of the company ranges from 5 billion won to 10 billion won, which is seemingly not a big burden even for Kyobo Book Centre taking a cautious approach to mergers and acquisitions.

The acquisition of Interpark Songin Books by Kyobo Book Centre could serve as a springboard for its wholesale book supply ambitions as it recently entered the market.

There are chances that Booxen, which was acquired by private equity firm Centroid Investment Partners in May, may also consider buying Interpark Songin Books to cement its dominant market position. Likewise, the third-largest player Book Plus is also one of the possible buyers. But the weak financial position of the target could make it less attractive to strategic investors, industry watchers said.

“Interpark Songin Books has been reaching out to potential buyers since last year but little progress has been made,” said an industry insider. “But the situation can change in the future because Booxen changed hands recently and Kyobo Book Centre is looking for opportunities to increase its market share in the book wholesale market.”

(Reporting by Hye-ran Kim)