Homeplus’ breakup-sale option gains traction as full sale hits hurdles [fn Market Watch]

[Financial News] Homeplus is prioritizing a sale of the entire company, but some see a breakup sale as a realistic alternative. Given the difficulty of finding a buyer for its entire hypermarket business, the view is that the transaction structure needs to be adjusted flexibly to suit prospective buyers’ financial capacity and business strategies. The approach is seen as a way to increase the chances of completing a merger and acquisition (M&A), a key part of corporate rehabilitation proceedings.
According to investment banking (IB) industry sources on the 11th, Homeplus’ sale adviser, Samil PwC, recently sent teaser letters to about 50 potential buyers, including domestic and international strategic investors (SIs) and financial investors (FIs). No clear prospective buyers have emerged so far, it is understood. The deadline for submitting expressions of interest is the end of this month.
Homeplus is currently prioritizing a sale of the entire business, including its hypermarket operations and headquarters. However, it is also open to selling some businesses or assets separately, depending on prospective buyers’ financial capacity and business strategies. If a full sale proves difficult, this could mean transferring stores with strong business prospects to other retailers or separately selling assets with high real estate value for development or leasing.
IB industry sources believe that adjusting the transaction structure in this way could increase the chances of completing an M&A deal. It could reduce the substantial funding burden of acquiring all of Homeplus while encouraging participation by investors interested in individual businesses or assets.
A key factor in this sale is not only the purchase price but also the funding needed to restore the business after an acquisition. Since additional funds will be needed to normalize product supplies, secure working capital and manage staffing, prospective buyers must consider both the acquisition price and the cost of restoring the business. This is why a breakup sale is being discussed as an alternative that could ease investors’ burden.
A Homeplus representative said, “Both the company and the union know that they can survive only if an M&A deal is ultimately completed,” adding, “If no prospective buyer comes forward, a breakup sale could be an alternative.”
The union also reaffirmed its willingness to cooperate toward completing an M&A deal. In a statement, the Homeplus branch of the Mart Workers’ Union said, “We will honor our commitment to cooperate toward completing an M&A deal,” and added, “The government should take the lead directly in finding a buyer.”
IB industry sources say a flexible approach that considers both a full sale and a breakup sale is needed, taking into account Homeplus’ business recovery and the preservation of jobs. The priority, they say, is securing a genuine buyer and finding a breakthrough in the corporate rehabilitation process, rather than focusing on the sale method itself.
[email protected] Kang Gu-gwi Reporter