Hyosung Chairman Cho Suck-rai |
By Yoon Ja-young
Staff Reporter
Hyosung Group's announcement, Thursday, that it has given up its plan to acquire Hynix boosted the company's share prices.
Hynix, meanwhile, is expected to struggle to find a new buyer as other big companies are being put up for sale in the M&A market.
Hyosung Group, which was the sole bidder for Hynix, announced Thursday that it was withdrawing its plan to acquire the chipmaker, after handing in its letter of intent to buy it on Sept. 22.
A series of suspicious activities put Hyosung Group in a difficult position, including the questionable acquisition of real estate overseas by Hyosung Group Chairman Cho Suck-rai's family.
An opposition lawmaker also placed the group under the microscope by bringing up the allegation that Hyosung had created a $3-million slush fund through a subsidiary in the United States.
Some in the market were also suspicious of the Hyosung-Hynix deal, citing a special tie between Hyosung and President Lee Myung-bak. A nephew of the Hyosung chairman married the youngest daughter of the President.
After delaying the deadline, however, Hyosung failed to submit a preliminary bid to Korea Exchange Bank, the main creditor of the chipmaker.
``We came to withdraw the plan as it became difficult for us to push for the deal due to the market's groundless misunderstanding, speculation, and rumors, including allegation that we are getting a special favor,'' the group said in a statement.
Hyosung started as a textile company, and expanded its business line to machinery, chemical, construction and IT. It also wished to expand to the semiconductor business and make a leap forward as a globally competitive conglomerate.
However, when Hyosung revealed its desire to acquire Hynix, estimated to be worth over 4 trillion won, the market was skeptical, citing its lack of experience in the chip-making business. Hyosung shares plummeted after the acquisition plan was announced.
The withdrawal pushed up Hyosung stocks on the bourse. Shares of Hyosung soared by 10,200 won to 79,100 won.
Hynix, meanwhile, is likely to have to wait a considerable time before finding a new buyer.
Big firms like Daewoo Construction, Daewoo International and Daewoo Shipbuilding & Marine Engineering are being put up for sale in the M&A market.
A Hynix deal, therefore, is likely to be possible only in the latter half of next year. If it fails to find a potential buyer in the local market, it might have to look for buyers overseas.
The world's second-largest DRAM maker posted 209 billion won in operating profits in the third quarter. Its total sales grew by 26 percent to 2.1 trillion won.
chizpizza@koreatimes.co.kr
|
Home l Archives l Learning Times | Sitemap | Subscription l Media Kit l PDF
