Yogiyo tender delayed again
Yogiyo's corporate image / Korea Times file
EBay Korea bid affects Yogiyo deal
By Kim Jae-heun
Yogiyo's acquisition deal has been put off for the second time. Its operator Delivery Hero delivered the message through its underwriter Morgan Stanley that it has requested to defer the final biding to next month.
It is unknown when the Berlin-based Delivery Hero will run the tender of its food delivery player, but it must be sold before Aug. 3 as designated by Korea's top antitrust watchdog.
The Korea Fair Trade Commission (KFTC) said the German firm must give up Yogiyo to take over Baedal Minjok (Baemin), the largest food delivery service here currently operated by Woowa Brothers.
The Yogiyo sale is being affected by the eBay Korea deal, for which Shinsegae is solely in talks with the U.S. e-commerce firm currently. Shinsegae is also included in the bidding shortlist for Yogiyo, and if it takes over eBay Korea, the retail giant is likely to withdraw its Yogiyo bid.
The sale prices of eBay Korea and Yogiyo are said to be 4 trillion won and 2 trillion won, respectively, which means Shinsegae would need 6 trillion won to acquire both firms simultaneously.
“It is too much of a financial burden for Shinsegae to handle the two deals in the trillion won range at the same time. It is very unlikely that the retailer will take over both eBay Korea and Yogiyo,” an industry source said.
Fair Trade Commission Chairperson Joh Sung-wook leaves the press room at the Government Complex building in Sejong City, last year, after speaking on the government's decision to approve Delivery Hero's takeover of Woowa Brothers only after the German firm sells off Yogiyo. Yonhap
Lotte Shopping, a retail unit of Lotte Group, can also rejoin the main bid for Yogiyo as it dropped its bid for eBay Korea.
“We will closely review the synergy and adequacy of valuation in the future and actively participate in the mergers and acquisitions that are deemed necessary,” Lotte Shopping CEO Kang Hee-tae said a day after his firm decided to withdraw its bid for eBay Korea.
However, many believe there are risks for major firms like Shinsegae and Lotte Shopping to jump into the food delivery service market, as there are many points of contention between restaurant owners and customers that need to be resolved.
“Lotte withdrew its preliminary bid for Yogiyo last time because it did not want to take the risk. It is most likely that private equity funds (PEFs) will acquire Yogiyo,” the source said.
There are five candidates competing for Yogiyo ― Shinsegae, MBK Partners, Affinity Equity Partners, Permira and Bain Capital. MBK Partners is seen as having the biggest potential as it has enough money to buy the country's number two food delivery service and it can create synergy with Homeplus which it operates.
But Delivery Hero is concerned that if it sells Yogiyo to a PEF, there is a chance that its food delivery service can be resold to market competitors like Coupang, which is fiercely on the tail of Baemin with its own Coupang Eats.
The German firm will likely request a clause prventing the resale of Yogiyo when it adjusts the stock purchase agreement after the main bidding if a PEF is selected.