KB (105560) Financial Group Inc. was among firms that made initial bids for Woori Finance Holdings Co. (053000)’s brokerage unit and five other divisions, as South Korea attempts to privatize the nation’s biggest financial group by assets.
KB Financial was among bidders for Woori Investment & Securities Co. (005940), Woori Asset Management Co., Woori Aviva Life Insurance Co. and Woori FG Savings Bank, KB said in a filing yesterday. The owner of Korea’s largest bank also made separate offers for Woori F&I Co., a distressed-asset trading firm, and leasing unit Woori Financial Co.
The units may fetch more than 1.5 trillion won ($1.4 billion) when combined, according to Nomura Holdings Inc. estimates in July, as the government makes its fourth effort to divest Woori since 2010. Seoul-based NH Financial Group said it also made an offer for the brokerage, asset management, savings bank and insurance units, which are being sold as a package.
“Financial holding firms like KB and NH may have the best chances to win this race as they’re eager to diversify businesses and to beef up their securities units,” Jun Bae Seung, an analyst at Shinyoung Securities Co. said by phone in Seoul yesterday.
KB Investment & Securities Co. and NH Investment & Securities Co. are among 62 brokerages operating in South Korea as of June, according to Financial Services Commission data.
PineStreet Group, a Seoul-based investment advisory firm, also entered a bid for the four-unit package, Vice Chairman Kim Myung Jeon said by phone from Seoul.
South Korea in June said it will sell Woori’s assets in three parts after failing to woo buyers for its 57 percent stake -- an attempt to recoup taxpayer money spent more than a decade ago to bail out the nation’s weakest banks.
The government is yet to announce the total number of bidders for the six units following yesterday’s deadline.
“For anyone who wants to grow in the area of securities and non-banking businesses, owning Woori Investment (005490) would make you a strong player,” Sohn Mi Ji, an analyst at Shinhan Investment Corp., said by phone from Seoul yesterday.
KB Financial Chairman Lim Young Rok, who took office in July, said on Aug. 14 he will consider takeovers to improve profit at its non-banking businesses. The firm last year also studied possible bids for Woori Finance’s assets under previous Chairman Euh Yoon Dae. NH Financial, originally a farmers’ cooperative, operates seven affiliates including Nonghyup Bank.
Separately, Daishin Securities Co. submitted bids for Woori Financial and Woori F&I, the brokerage firm said yesterday in a regulatory filing. Kiwoom Securities Co. handed in an offer only to buy Woori Asset Management, it said in a separate regulatory filing.
Top M&A Adviser
Woori Finance is seeking to sell a 38 percent stake in the brokerage business, 52 percent of Woori Financial, 99 percent of the insurance business it owns jointly with Aviva Plc (AV/) and all of the asset management unit, Woori F&I and the savings bank.
Buying Woori Investment, the country’s fourth-largest brokerage by market value, would give the winning bidder control of South Korea’s top merger and acquisition adviser and debt underwriter, according to data compiled by Bloomberg.
Shares of Woori Investment closed 0.4 percent lower at 11,600 won ahead of yesterday’s bidding results, valuing Woori Finance’s 38 percent stake at 878 billion won.
Woori Finance hired Citigroup Inc. (C) and Samil PricewaterhouseCoopers to help arrange the sale of the six businesses.
Shares of Woori Finance closed 2.2 percent lower at 13,200 won before yesterday’s release, paring this year’s gain to 12 percent. The benchmark Kospi Index has gained 2.8 percent.
As part of its three-pronged asset sale process, South Korea has already received bids for two regional banks. Its flagship Woori Bank (005300), credit card business and other units will be sold next year.
Korea Deposit Insurance Corp., the state-run agency that owns the government’s 57 percent stake in Woori Finance, said on Oct. 18 that it received four bids for regional lenders Kyongnam Bank and seven offers for Kwangju Bank. It plans to accept final bids in December and complete the sales next year.
The banks were folded into Woori Finance in 2001 after the government created the holding company for lenders rescued after the Asian financial crisis in 1997-1998.
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