Candidates vying for Tongyang Magic Inc., South Korea’s kitchen appliances manufacturing and renting firm, are teaming up for upper hand to win over the bid that is expected to be finalized on Tuesday.

According to the investment banking industry on Sunday, a consortium led by private equity fund Glenwood Private Equity and NH Private Equity that owns a full stake in Tongyang Magic and NH Investment & Securities Co. that has led the sale have shortlisted contestants and are ready to pick the preferred bidder by Tuesday as scheduled.

The shortlisted candidates are up to eight including companies and private equity funds such as CJ O Shopping Co., SK Networks Co., Hyundai Department Store Co., Unid Co., AJ Networks Co., CVC Capital Partners and Stick Investment Co. that conducted due diligence to hand in their final pitch for company.

Three units of large conglomerates - SK Networks, CJ O Shopping and Hyundai Department Store - are dubbed as winning bidders. But PEFs have turned up as formidable candidates by teaming up.

Unid, a chemical unit of OCI Group, joined up local private equity fund Stick Investment. The chemical company is eager on Tongyang Magic to have a retail arm. The company made its position better by linking up with Stick Investment for funding.

AJ Networks plans to form a consortium with local private equity fund IMM PE.

CVC Capital Partners is said to be courting other bidders as well. Its shot at the company would go up if it succeeds to team up with any of the major retailers - CJ O Shopping, SK Networks and Hyundai Department Store.

Given the heated competition, the sale price is expected to beat initial market expectation and hover at between 500 billion won ($453 million) and 600 billion won. If bid prices do not differ much, the company would go to the highest bidder in an open ascending price auction.

The auction host, however, will likely consider the non-price factors such as job stability and long-term vision to nurture the company.

By Kang Doo-soon

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