Lotte’s acquisition instinct may come again as it moves forward with eBay Korea Sale’s progress reminds market insiders of retail giant’s takeover of KT Rental in 2015

Translated by Ryu Ho-joung 공개 2021-06-10 08:08:07

이 기사는 2021년 06월 10일 07:35 더벨 유료페이지에 표출된 기사입니다.

Two retail conglomerates engage in the tug of war in what could be one of the biggest deals in South Korea this year.

Lotte Group and Shinsegae Group submitted binding offers for eBay’s South Korean operations in the latest round of bidding on Monday, industry sources said. The other two shortlisted bidders, private equity firm MBK Partners and SK Telecom, did not submit their bids.

The two conglomerates have taken contrasting approaches so far. Shinsegae Group, which is seeking to acquire eBay Korea through its supermarket chain Emart, has expressed strong interest in the company from the early stages of the sale. It also teamed up with internet giant Naver, creating a powerful consortium for the ecommerce business.

In contrast, Lotte Group, which is weighing the acquisition through Lotte Shopping, has been relatively quiet since it made an indicative offer in March, with some even expecting the conglomerate to ultimately withdraw from the race.

But those thoughts have been quelled after Lotte is said to have been in talks with some financial services firms since late May about financing for the acquisition.

For some, this brings to mind Lotte’s 2015 takeover of KT Rental – now renamed Lotte Rental – where the conglomerate, which has grown through a series of mergers and acquisitions, showed the art of acquisition.

KT Rental, which was up for sale by KT Corp in July 2014, attracted strong interest from potential buyers, with more than 20 firms submitting bids for the car rental company in the first round of bidding in November 2014. Of nine bidders shortlisted, six participated in the second round of bidding in January 2015.

As the race heated up, offers submitted in the second round of bidding rose to the 900 billion won ($807 million) range, much higher than an original price tag of around 600 billion won. KT Corp conducted another round of bidding in February 2015, hoping competition between bidders to further push up the price.

Three bidders – Lotte, Affinity Equity Partners and a consortium of Hankook Tire and Orix Private Equity – submitted fresh offers in February’s round of bidding. Few had expected Lotte to win the race, especially given its well-known cautious approach to spending. But in a surprise twist, the conglomerate outbid rival suitors by raising its bid to 1.02 trillion won.

Lotte, with its secretive culture, reportedly prepared the final bid for the car rental company on its own, even without consulting advisers involved in the deal.

Lotte may surprise the market again this time, as eBay is likely to want to hold another round of bidding to receive higher bids with only two bidders left in the race, industry watchers said. Unlike rival suitor Shinsegae, which teamed up with Naver, Lotte is unlikely to form a consortium to acquire eBay Korea. (Reporting by Hee-yeon Han)
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