Shareholders in Hi-mart Co have rejected a request by South Korean buyout fund MBK Partners to extend exclusivity talks to buy a controlling stake in the local electronics retailer, leaving the firm open to a rival offer from Lotte Shopping Co.
Despite MBK’s reported offer of as much as $1.1bn, Lotte has long been regarded as a better fit for the business, and news of the rejection has sent shares in Hi Mart soaring by around seven per cent.
MBK last week was picked as the preferred bidder to buy a majority stake in the company, according to a regulatory filing. Shares in Hi-mart, Lotte and Eugene all fell following the news.
Hi-Mart’s biggest shareholder Eugene Corp and two other shareholders have tabled a combined 65.3 per cent stake in the business, although the auction ran into difficulties when Hi-mart’s CEO and others were charged with embezzling $228m.
The combined stake held by Eugene Corp, Sun Jong-koo, HI Consortium Investment Co, and private equity fund H&Q Asia Pacific has a market capitalisation of around KRW850bn ($735m).
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