SEOUL, March 23 (Korea Bizwire) – South Korea’s top asset manager Mirae Asset Financial Group said Wednesday it will not bid for Hyundai Securities Co. to focus on completing its latest takeover deal, leaving KB Financial Group and Korea Investment Holdings Co. as strong candidates in the final auction scheduled for this Friday.
Mirae Asset has stepped up its drive to increase its equity capital to compete with bigger foreign rivals such as Nomura Securities and Morgan Stanley. It became the country’s biggest brokerage by equity capital following the acquisition of Daewoo Securities late last year.
The brokerage giant has been considering taking over Hyundai Securities, the No. 5 brokerage house, but in a sudden twist, it decided earlier in the day not to participate in the final bid.
As Mirae Asset dropped its bid, KB Financial and Korea Investment Holdings will vie for a controlling 22.56-percent stake in Hyundai Securities, a deal that could fetch between 700 billion won (US$622 million) and 1 trillion won, when the premium paid to management is included.
KB Financial and Korea Investment Holdings have their own brokerage units, but they are prodded to go abroad and strengthen their presence in the securities industry.
Thus, the two companies took part in the bid for Daewoo Securities last year though they were beaten down by archrival Mirae Asset.
“We have just finished the due diligence on Hyundai Securities and plan to join the final auction,” said a Korea Investment Holdings spokesman. “We have an interest in Hyundai (Securities) to inflate our assets and expand into overseas markets.”
KB Financial, the country’s No. 3 banking group by assets, is also “calculating” the final bid price for Hyundai Securities. It has been up for sale since last year by Hyundai Merchant Marine Co., the country’s second-biggest shipping line after Hanjin Shipping Co., as part of its self-rescue efforts.
Meanwhile, the sale of Hyundai Securities is essential for Hyundai Merchant which recently asked for co-management with creditors to put its business back on track. Hyundai Merchant, a core affiliate of the shipping-to-finance conglomerate Hyundai Group, swung to a net loss last year amid oversupply and lower freight rates.
EY Han Young consulting firm is advising the deal. The lead manager will receive the final bids until 6 p.m. Friday.’