An auction to sell a 52.17 percent stake in Ssangyong Materials Corp., a major auto parts maker in South Korea, drew more than 10 potential buyers in a heated bidding battle.

According to the investment banking industry on Tuesday, over 10 interested bidders, including KCC Corp. and SC Private Equity Ltd., handed in their preliminary bids for a 52.17 percent stake in Ssangyong Materials owned by Ssangyong Cement Industrial Co. by Wednesday deadline. The deal is expected to fetch 90 billion won ($79.1 million) based on the company’s latest stock price. Most bidders have bid for strategic purpose.

Samil PricewaterhouseCoopers, the financial advisor, will shortlist eligible buyers within this week who would be given a chance to conduct due diligence in November. If all goes as planned, the sale would be concluded within this year.

Ssangyong Materials supplies its core product magnets used for automotive motors to major global auto parts makers, including Robert Bosch GmbH and Valeo SA.

As of last year, it commanded 11 percent in the global motor magnet market and up to 40 percent in the local market. Its share in the domestic ceramics market also exceeded 30 percent.

Thanks to its leading position at home, the company has raked in an operating profit of more than 6 billion won and sales of over 100 billion won on average annually. Last year, it earned 6.2 billion won in operating profit and 106.6 billion won in sales on a consolidated basis.

Its parent company Ssangyong Cement Industrial, the country’s leading cement maker, has been reviewing divestiture of its subsidiaries, including its lucrative Ssangyong Materials, to focus more on its core cement business since it was acquired by private equity investment firm Hahn & Company last year.

Ssangyong Materials shares were traded at 4,420 won as of 2:24 p.m. on Thursday, down 8.39 percent, or 405 won, from the previous session, whereas Ssangyong Cement Industrial shares rose 1.19 percent, or 200 won, to 17,050 won.

By Chun Gyung-woon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]