Homeplus Courts 50 Potential Buyers at Home and Abroad... Takes a “Buyer-Tailored” Approach to Sale [fn Market Watch]

[Financial News]  Homeplus has significantly lowered the bar for finding a new owner. After sending teaser letters to more than 50 potential buyers at home and abroad, the company has also left open the possibility of selling the business as a whole or in separate parts, according to sources. The strategy is aimed at increasing the chances of a successful sale by broadening not only the buyers’ nationalities and investor profiles but also the possible acquisition structures.
According to investment banking (IB) industry sources on the 22nd, Samil PwC, the adviser handling Homeplus’s sale, recently sent teaser letters to about 50 potential buyers, including domestic and overseas strategic investors (SIs) and financial investors (FIs).
The basic sale package consists of 67 large-format stores currently in operation, along with the headquarters and online business divisions. Of the 67 stores, 54 had previously generated profits. The remainder includes hub stores selected with consideration for online logistics and regional sales networks.
However, Homeplus does not appear to be insisting on selling all 67 stores as a single package. Sources said the company has also left open the possibility of restructuring the deal, such as dividing certain businesses or assets for acquisition, depending on a buyer’s financial capacity and business strategy. The sale of real estate at closed company-owned stores will also proceed in parallel to secure funds for repaying senior claims.
Ultimately, the key variable is the money required after the acquisition rather than the purchase price itself. Because additional funds will be needed to normalize product supplies, provide working capital and operate the workforce, prospective buyers must calculate the purchase price together with the turnaround funding. In other words, the ability to finance Homeplus’s post-acquisition recovery is more important than simply having enough money to buy the company.
IB industry sources said Homeplus’s strategy shifted toward closing the deal rather than screening buyers after the sale failed last year. Because the number of domestic operators capable of acquiring the entire business at once is limited, the company has a growing need to broaden potential demand to include foreign capital and financial investors.
A senior IB industry official said, "In this sale, what matters is not whether the investor is domestic or overseas or whether it is an SI or FI, but whether it can actually put up the acquisition funds and sustain the turnaround afterward. The approach is closer to structuring the transaction around prospective buyers with a genuine intention to acquire than to fitting buyers into a structure predetermined by the seller."
The official added, "Ultimately, the decisive factor in this Homeplus M&A is the transaction structure rather than the prospective buyer itself. The key to this renewed sale appears to be not merely expanding the candidate pool to more than 50, but also flexibly designing the acquisition scope and transaction structure around buyers willing to commit actual funds if an outright sale proves difficult." 

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