The JoongAng Ilbo Takeover Battle Heats Up—Now a Six-Way Race Including Orion and Daou Technology [fnMarketWatch]

[Financial News] The takeover battle for control of JoongAng Ilbo, which has entered a workout program, has grown larger than expected. With Orion and Daou Technology joining the race, the number of prospective buyers has risen to six. In particular, the entry of Daou Technology, the largest shareholder of KIWOOM Securities, is being viewed as an unexpected move even in the investment banking (IB) industry.
According to the IB industry on the 23rd, Samil PricewaterhouseCoopers, the sales advisor for JoongAng Ilbo, closed the submission of letters of intent (LOIs) on the 21st. Six parties—Orion, Daou Technology, Global Sae-A, OK Financial Group, E Broadcasting and Geumbo Development—took part. The seller is reportedly planning to include all six on the shortlist of qualified bidders. The candidates are expected to conduct due diligence next month before participating in the final bidding.
The parties drawing attention are Orion and Daou Technology. Orion, which has film investment and distribution company Showbox as an affiliate, has a connection to the content industry.
IB industry observers believe Orion will make a final decision after reviewing JoongAng Ilbo's financial condition and business viability through due diligence.
Daou Technology's appearance is considered even more surprising. Daou Technology is the largest shareholder of KIWOOM Securities, while finance and information technology (IT) are the group's core pillars.
Although it operates webtoon and web novel businesses through KidariStudio, acquiring control of a general daily newspaper is outside its existing portfolio.
“Even within KIWOOM Securities, no one had been aware of this at all. Despite having financial affiliates, the company has been regarded as having a closed culture toward the media, so its acquisition of a media company is surprising, and it is unclear whether synergies will emerge after the acquisition,” a senior IB industry official said. “It may also be considering media and content as a new business pillar beyond a mere investment purpose,” the official assessed.
Global Sae-A and OK Financial Group have also entered the race. Global Sae-A has Jeonju Paper, a producer of newsprint, as an affiliate. E Broadcasting, which operates the economic YouTube channel “Sampro TV,” is reportedly considering forming a consortium with outside investors.
Meanwhile, this deal will proceed through a third-party allotment capital increase rather than a sale of shares held by the existing largest shareholder. The final acquirer will subscribe to the new shares and become the largest shareholder, while the acquisition funds will flow directly into JoongAng Ilbo and be used to improve its financial structure.
“Six parties entering at the LOI stage is a stronger-than-expected showing, but whether all of them will remain after due diligence is a separate matter,” an IB industry official said. “The parties that enter the final bidding after confirming both the new funds and additional normalization costs will be the actual acquisition candidates,” the official added.
“Daou Technology is a candidate drawing considerable interest in the market because its existing businesses have a relatively weak connection to running a media company,” another official said. “The key point to watch going forward will be what strategy it used to join the takeover race,” the official added.

[email protected] Kim Kyung-ah Reporter