Hotel Lotte taps investors for South Korea's biggest IPO

By Park Sae-jin Posted : January 18, 2016, 14:11 Updated : January 18, 2016, 14:11

[courtesy of Lotte Hotel]



South Korea’s Hotel Lotte is tapping international investors for what could be the biggest initial public offering in South Korea’s history.

Hotel Lotte, a subsidiary of South Korea’s fifth largest conglomerate Lotte Group, is planning a non-deal roadshow in Hong Kong and Singapore at the end of January, according to a market source

Depending on market conditions, the deal could raise US$3bln–$5bln, according to the source. At the top of that range, the deal would surpass Samsung Life’s $4 billion IPO in 2010 as South Korea’s largest ever listing.

The prospect of a gigantic IPO from Hotel Lotte fuel hopes for a bumper year for equity-capital raising in South Korea.

Last December, Hotel Lotte applied for a preliminary stock listing on the Korea Exchange, a crucial step for retail giant Lotte Group to improve its complex ownership structure and improve corporate transparency. It plans to finalize the deal within the first half of this year.

Hotel Lotte’s CEO Song Yong-dok told reporters last week that it will actively look for overseas business opportunities through mergers and acquisitions (M&As) once it acquires cash from the IPO.

"With cash acquired from the IP O, we will be able to consider additional M&A deals if there are good opportunities. Our final goal is to foster Hotel Lotte as a global brand," Song said.

Song said Lotte has received several offers after it bought New York Palace Hotel in Manhattan for $805 million last year.

An IPO would also pave the way for a further restructuring of the family-controlled groups. Chairman Shin Dong-bin, the son of Lotte Group’s founder, ousted his older brother in a boardroom coup earlier this summer.

By Alex Lee
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