6 bidders vie for control of JoongAng Ilbo as sale enters final round
Joongang Ilbo headquarters in Seoul / Korea Times photo by Yun Gi-hun
Preferred bidder for newspaper publisher to be named by end of Oct.
The final round of bidding to acquire control of JoongAng Ilbo, one of Korea’s leading newspaper publishers, is officially down to six contenders, industry officials said Monday.
The six bidders, all of whom participated in last month’s preliminary bidding, include confectionery maker Orion, Global Sae-A, Daou Kiwoom Group, OK Financial Group, Geumbo Development and eBroadcasting. Daou Kiwoom Group is participating as part of a consortium with CJ Group, which emerged as a surprise contender in reports on Friday.
JoongAng Ilbo entered a creditor-led workout program in July after its parent, JoongAng Group, ran into a liquidity crisis. The program allows a company to negotiate debt restructuring with creditors while retaining greater control of its operations than it would under court-supervised rehabilitation.
The buyer will gain control of the publisher by acquiring newly issued shares rather than buying out the existing controlling shareholder. This arrangement would channel the acquisition money directly into cash-strapped JoongAng Ilbo, giving it fresh capital to shore up its finances.
The deal itself is estimated to be worth as much as 500 billion won ($376 million). But with debt and payment guarantees still weighing on the publisher, the buyer’s ability to promptly provide additional funding will be a key consideration.
The Daou Kiwoom-CJ consortium is seen as a leading candidate, given the groups' financial resources and established business operations.
CJ already holds a 9.24 percent stake in JoongAng Ilbo through its affiliate CJ OliveNetworks, making it the newspaper’s third-largest shareholder.
Both groups are subject to a legal cap on ownership of general daily newspapers under Korea’s Act on the Promotion of Newspapers. Large business groups cannot own more than 50 percent of such a publication, making a partnership one possible way to split the stake between them.
The publisher’s creditors plan to select a preferred bidder by the end of October, after reviewing the proposals.