By Kim Yoo-chul
Samsung is in discussions with several financial investors to sell the group’s advertising affiliate ― Cheil Worldwide ― after earlier talks fell through with French advertising and PR company Publicis to hand over the managerial rights to the company.
“At least three investors including one Chinese real estate company showed keen interest in acquiring the stake in Cheil. Working-level discussions are underway. The key issue is price,” a source who is knowledgeable with the issue said Sunday.
Samsung Corporate Strategy Office (SCSO), the group’s control tower, declined to specify the name of the new bidders that Cheil Worldwide is talking to. Cheil Worldwide declined to comment.
The source said Cheil Worldwide will announce the failure of the merger talks with Publicis to the Korea Exchange and then notify the Exchange of its new plans for the stake sale, early next week.
Cheil Worldwide, Korea’s largest advertising agency, had been in negotiations with the Paris-based Publicis to sell a 30 percent share for some 600 billion won including a premium in management.
But Publicis asked Cheil Worldwide if it could handle Samsung Group’s advertising “for certain periods” exclusively, as a condition for the acquisition of the stake, which Cheil later refused to accept.
Publicis was said to have complained about Samsung’s moves to transfer the group’s sports business to Cheil Worldwide as the Samsung decision is against Publicis’ “best interests.”
“Cheil Worldwide will find ways to protect the best interests of its shareholders. The negotiations should be beneficial to all interested parties,” said the source.
The renewed sales talks came as Samsung is stepping up its efforts to realign the conglomerate’s business structure by selling non-core and unprofitable assets, with the group vice chairman Lee Jae-yong holding initiatives for change to help the conglomerate remain adaptive.
Samsung Electronics is the biggest shareholder of Cheil Worldwide, holding 12.64 percent of the company, followed by Samsung C&T with 12.60 percent.