SKT may be lone bidder for Hynix

By Kang Seung-woo

Despite creditors’ efforts to lure more buyers, SK Telecom is expected to be the lone bidder in the sale of a 15 percent stake in Hynix Semiconductor, industry sources said Wednesday.

According to the financial industry, Credit Suisse, a co-main creditor of the deal, tapped 12 local major companies’ opinions on whether they are interested in joining the takeover process for the world’s No. 2 memory chipmaker but there was no positive response from them.

In a related move, creditors extended the deadline for the final bidding by a week to Nov. 10, Tuesday, with the hope that other buyers would emerging to vie with SK Telecom.

In July, STX Group, a Korean shipping and shipbuilding conglomerate, and SK Telecom, the nation’s largest mobile carrier, submitted letters of intent (LOI) to purchase the stake in the chipmaker, with an estimated value of 1.5 trillion won ($1.32 billion), and did seven weeks of due diligence.

However, the sale hit a snag last month, as STX pulled out of the bidding due to global uncertainty and the huge investment burden, leaving SK Telecom, the flagship unit of SK Group, as the sole bidder for the controlling stake.

Due to the departure of STX Group, the one-way bid might be seen as unfair and lacking in transparency.

“Among the 12 major firms, some are facing financial difficulty, while others aren’t interested, so SK Telecom is the only player,” said an official of the financial industry.

In addition, a lack of time until the deadline is not helping the sale, either.

If another bidder emerges, it is unlikely that it will have done due diligence on Hynix.

If it turns into a one-way deal, SK Telecom is expected to have an upper hand in terms of bidding price.

But creditors may reject SK Telecom if it offers an unreasonably low price, which could get them accused of breach of trust.

Attempts to sell off the stake ran into trouble as volatile business conditions in the chip making sector and huge investments needed made potential investors wary of buying the firm.

Creditors pumped $4.6 billion into Hynix through debt-equity swaps in 2001 and 2002 to keep it afloat.