JC Partners delays KDB Life takeover again

The KDB Life Insurance headquarters in Seoul / Korea Times file

By Park Jae-hyuk

JC Partners is facing growing concerns over its bid to take over KDB Life Insurance because of its failure to close the deal in time, according to industry sources, Monday.

Sources said JC Partners and the Korea Development Bank (KDB) recently decided to postpone the stock purchase agreement until next month because the local private equity firm (PEF) is still facing difficulties in raising money for the acquisition.

This is not the first time they have delayed the deal closure.

Being selected as the preferred bidder to take over KDB Life, JC Partners was initially supposed to sign the stock purchase agreement with KDB in late August. However, the buyer reportedly asked the seller last month to postpone the agreement until the end of September, according to sources.

KDB has apparently offered preferential treatment to JC Partners, given that the state-run lender is attempting to sell the life insurance arm for the fourth time since 2014.

Earlier this month, the KDB Consus Value PEF that controls KDB Life changed its articles of association to deprive Consus Asset Management of its veto. Consus, one of the KDB Life shareholders, has remained reluctant to sell the insurer for a lower price, so the latest change has enabled JC Partners to buy KDB Life for less than expected.

In addition, KDB allowed JC Partners to name former DAYLI Financial CEO Shin Seung-hyun as the new president of KDB Life in August. According to industry officials, it was unusual for a preferred bidder to appoint the chief executive of a company it was seeking to buy, before the deal was closed.

Despite these favorable terms, JC Partners is reportedly facing difficulties in attracting a 150 billion won ($127 million) investment which is necessary to initiate the deal.

The price of KDB Life is estimated at 550 billion won. JC Partners has already attracted a combined 200 billion won investment from KDB and Woori Bank. The buyer can execute the acquisition with 350 billion and pay the 200 billion won balance after the event. However, if JC Partners fails to raise the 150 billion won that is immediately required it will not be able to close the deal.