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| Interpark website's main page captured / Courtesy of Interpark |
By Anna J. Park
Interpark's stock price nosedived on Wednesday, as investors dumped shares in response to major firms dropping their bids for its acquisition. The e-commerce platform company's share price finished at 8,390 won ($7.25), a 12.51 percent fall from the previous day.
Market watchers hoped one of the potential buyers ― Yanolja, Kakao or Naver ― could have participated in the bidding for Interpark's acquisition. These big names are said to have received an information memorandum (IM) distributed by NH Investment & Securities, the main underwriter of the sale.
The share price, which had skyrocketed recently on expectations for the acquisition deal, fell by more than 16 percent in just two trading sessions.
The main reason behind the abandoned bidding process is considered to be questions about the sustainability of Interpark's key business models ― performance reservations and travel booking ― amid the spread of the Delta variant of the coronavirus. Another reason for the lukewarm responses from potential bidders is the exclusion from the acquisition deal of the company's lucrative subsidiary iMarketKorea ― a global distributing company focused on industrial goods ― and its bio business department.
The selloff deal covers the platform company's tourism, booking, performance and shopping businesses only, as it aims to sell a 28.41 percent stake or 23 million shares held by Interpark Chairman and co-CEO Lee Ki-hyung, who is Interpark's largest shareholder. Interpark plans to spin off its tourism and ticket reservation department as a new company and sell a 100 percent stake in the newly spun-off company to the buyer of the acquisition.
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| Interpark logo |
Despite the initial lukewarm response, leading tourism players like Trip.com Group Limited ― China's top travel business formerly called Ctrip.com International ― and Yanolja's industry rival Good Choice Company are said to have strong interest in acquiring Interpark. Both companies would likely see synergy from the acquisition.
Trip.com is a Nasdaq-listed company with ticker TCOM, which now accounts for around 60 percent of the Chinese market. As the company expands its scope to the global market, the acquisition of Interpark would be a stepping stone to fully enter into the Korean tourism and ticket reservation market, said stock market analysts.
Good Choice Company will be positioned to better trail market leader Yanolja in the leisure business if it acquires Interpark, analysts said.
Since CVC Capital Partners, a global private equity and investment firm, took over Good Choice in 2019, the private equity firm has been boosting its corporate value by taking a bolt-on strategy ― referring to the acquisition of smaller companies in the same line of business to increase its strategic value. As part of the strategy, Good Choice acquired MangoPlate, a local restaurant discovery service application, in 2020.
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