Woori Finance Holdings Co. (053000) closed preliminary bidding for its brokerage and five other units as part of South Korea’s latest attempt to privatize the nation’s largest financial group by assets.
KB (105560) Financial Group Inc. was among bidders for Woori Investment & Securities Co. (005940), Woori Asset Management Co., Woori Aviva Life Insurance Co. and Woori FG Savings Bank, the company said in a regulatory filing. The owner of Korea’s largest bank also made initial offers for Woori F&I Co., a distressed-asset trading firm, and leasing unit Woori Financial Co., KB said.
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 attempt to divest Woori since 2010. 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 effort to recoup taxpayer money spent more than a decade ago to bail out the nation’s weakest banks.
“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 in Seoul today before the bidding deadline.
NH Financial Group said in an e-mailed statement it also placed an offer for the brokerage, asset management, insurance and savings bank units, which are being sold as a package. PineStreet Group, a Seoul-based investment advisory firm, entered a bid as well, Vice Chairman Kim Myung Jeon said by phone in Seoul.
Daishin Securities Co. separately submitted bids for Woori Financial and Woori F&I, the brokerage firm said 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 today’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 today’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, Woori Finance 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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