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Dongwon Group and Harim Group in Two-Way Contest for HMM as LX International Withdraws

Dongwon and Harim lead final bid for HMM, while LX International bows out over rising sale price concerns
South Korea
h 003380.KQ d 006040.KO h 011200.KO l 001120.KO Mid and Small Cap 2000
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The competition for the acquisition of the prominent shipping company HMM has narrowed down to a head-to-head battle between Dongwon Group and Harim Group, as reported. The main bidding, conducted by HMM creditors KDB Bank, Korea Ocean Business Corporation, and sales manager Samsung Securities, saw the participation of a consortium led by JKL Partners, comprising Dongwon Group and Harim.

Notably, LX International, initially shortlisted as an eligible acquisition candidate in the preliminary bidding, chose not to partake in the crucial main bidding. Reports indicate that LX International, despite having significant financial power, withdrew from the acquisition process due to concerns about the escalating expected sale price.

Market analysts observe that absorbing around 57.8% of the shares subject to sale would require approximately KRW 6.5 trillion, based on market prices. When factoring in the management rights premium (20-30%), the expected sale price surpasses KRW 7 trillion. This elevated acquisition price, exceeding the initial market expectations of 5 to 6 trillion won, has heightened the financial burden on potential acquirers.

KDB Bank plans to consolidate the desired acquisition prices and qualitative evaluation scores from the candidate companies, with the results expected to be announced in December at the latest. An industry insider notes the financial constraints of both Dongwon and Harim, stating it would be challenging for them to make substantial bids exceeding 5 to 6 trillion won, leaving open the possibility of a failed bid scenario.

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