Financial groups snub Woori auction
By Kim Jae-won
Three prospective bidders expressed interest in acquiring a controlling stake in Woori Financial Holdings, the government said Wednesday. However, none of the bidders included an existing financial institution, casting murky prospects on the government attempts to sell the banking ㅠbehemoth.
The Korea Insurance Deposit Corp. (KDIC), which controls the government’s 57 percent stake in Woori, had received three bids when it closed applications at 5 p.m. Wednesday from private equity funds MBK Partners, Vogo Fund and TStone Corp. Woori’s rivals, such as KB, Shinhan and Hana, stayed out of the race, KDIC said.
Representatives of MBK and Vogo were not available for comment, while TStone refused to confirm its bid.
Experts say that the bidding process may not go smoothly as the government may not allow a private equity company to take over Woori.
“I don’t think that the government will give Woori up to a private equity firm,” said Jeon Hyo-chan, an economist from Samsung Economic Research Institute. “Considering the industry as a whole, it is better that a banking group acquires Woori.”
Jeon said that Korean financial groups were not prepared to bid on the deal due to their lack of financial capability. KB Financial Group has been focusing on strengthening its finances since former Korea University president Euh Yoon-dae took over the helm of the group a year ago.
Shinhan Financial Group has struggled to recover from an internal feud between three top executives last year, and now seeks to revive itself under the leadership of new chairman, Han Dong-woo, who became the top administrator of the company three months ago.
Hana Financial Group aims to buy a 51 percent controlling stake in Korea Exchange Bank from Lone Star Funds and is awaiting regulatory approval from the Financial Services Commission (FSC), which suspended its decision until a legal dispute over Lone Star is resolved.
KDB Financial Group had been a strong candidate for the Woori acquisition, but the financial regulator recently scrapped its plan to sell the latter to it due to strong public criticism.
The FSC's 2010 efforts to find a private owner for Woori fell through due to lukewarm interest from investors. The financial watchdog earlier said it plans to pick a preferred bidder by September.
Woori was bailed out with taxpayer money in the aftermath of the 1997-98 Asian financial crisis. The government injected 12.8 trillion won ($11.8 billion) of taxpayers' money into Woori in a bid to rescue the company from near bankruptcy.
The sale of Woori is one of the top priorities pushed by the government of President Lee Myung-bak as part of its broader plans to privatize financial institutions, including the state-run KDB, to raise competitiveness in the financial sector.