Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
CJ Olive Young kicks off IPO process
Olive Young's Myeong-dong store in Seoul / Courtesy of CJ Olive Young
By Park Jae-hyuk
By Park Jae-hyuk
CJ Olive Young sent a request for proposal (RFP) to securities firms here and overseas, Friday, looking for underwriters for its forthcoming initial public offering (IPO) which is widely viewed as a preparatory measure for CJ Chairman Lee Jay-hyun to transfer control of the group to his oldest son, Lee Sun-ho.
The health and beauty product chain is expected to select one local securities firm and one from overseas as the underwriters for its listing by no later than November, after asking contenders about their track records and peer groups that can be compared with CJ Olive Young. The deadline for bids is Oct. 21.
Market participants expect the company will go public in the first half of next year.
Its valuation is estimated at around 2 trillion won ($1.7 billion), considering that Glenwood Private Equity invested 414.1 billion won in March to become CJ Olive Young's second-largest shareholder having a 22.56 percent stake.
The CJ Olive Young IPO will accelerate CJ Group's managerial succession, giving owner family heirs a chance to secure money to increase their stakes in CJ Corp., the group's holding company. At this moment, the chairman's son holds a 2.75 percent stake in CJ Corp., while the daughter owns 1.19 percent.
If the son sells his 11.09 percent stake in CJ Olive Young after its IPO and the daughter sells her 4.26 percent stake, they will secure at least 300 billion won, being able to acquire over 10 percent in CJ Corp. They already earned a combined 140 billion won when they sold their CJ Olive Young shares to Glenwood.