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Biz News Korea(Eng)
KDB mulls unusual payback of due diligence cost for bidders of Kumho Tire
- Collected
- 2016.09.05
- Distributed
- 2016.09.06
- Source
- Go Direct
According to the investment banking industry on Sunday, KDB is mulling the unprecedented move of covering the entire costs for due diligence including advisory fees for the preferred bidder and even the second ranked bidder if Kumho Asiana Group Chairman Park Sam-koo exercises the right of first refusal that allows him the priority in repurchase management control under the same term with any highest bidder. A sales deal that includes the right of refusal could fail to attract many buyers because they are afraid to invest much in a deal where the right’s holder has an absolute advantage over other bidders.
Industry watchers believe that KDB seems to have been putting all-out efforts to make the high-stake deal successful. The KDB would reportedly pay back the cost with the money paid by Park if and when he exercises the right to buy back the company. The amount is expected to reach three billion won ($2.7 million) to five billion won.
Kumho Tire’s shareholder group consisting of nine financial companies including KDB and Woori Bank plans to issue a public notice on the sale of the company on September 20 and invite candidates to submit letters of intent (LOI).
The strongest contender is Park who has the right of first refusal. He can decide whether to exercise the right after a preferred bidder offers a final bidding price.
By Kim Hyo-hye
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]