[Courtesy of CJ Group]
A race to acquire Tongyang Magic, a lucrative kitchen appliance maker, has intensified among potential buyers including South Korea's food and beverage giant CJ Group as the final round of bidding draws near.
The homegrown Glenwood-NH private equity consortium has put a 100 percent stake in Tongyang up for sale. The consortium took over the country's third largest home appliance vendor in 2014 for 280 billion won (253 million US dollars).
LIG Investment and securities said the consortium could reap hefty profits from the sale of Toyang, citing its enhanced brand value and good corporate earnings.
Tongyang, which manufactures and rents out kitchen appliances, has posted solid growth especially in its rental service with its net profit last year soaring to 17.6 billion won from one billion won in the previous year. Sales rose 10 percent on-year to 390.3 billion won.
Preliminary bidders include the units of three domestic conglomerate -- Hyundai Department Store Group, SK Networks and CJ Group -- as well as a number of strategic and financial investors.
LIG said that CJ is more aggressive than other bidders as it can use Tongyang to expand its business portfolio. This is CJ's first serious corporate hunt after its ailing head, Lee Jay-hyun, was granted a special presidential pardon last month.
Lee, 56, was initially sentenced to four years in prison in 2014 on conviction of embezzlement, tax evasion and breach of trust. The sentence was later reduced to three years by the high court. After the Supreme Court ordered another review, Lee received a 30-month jail sentence in December last year.
The tycoon, however, did not go straight to prison as the court granted a stay of sentence pending hospital treatment. Lee, who has undergone a kidney transplant, claims to suffer from multiple illnesses, including a degenerative neurological disease.
Market watchers predicted that with Lee's comeback, CJ would step up its hunt for other companies. It has already jumped into the race to acquire the local operation of US fast food chain McDonald's.
CJ's biggest rival in the bidding war is SK Networks, a trading and retail arm of South Korea's third largest conglomerate, SK Group, which sees Tongyang as an attractive prey following its failed attempt to acquire a major cable channel operator.
In an effort to bolster next-generation businesses for sustainable growth in the saturated and competitive domestic market, top mobile carrier SK Telecom has offered to buy CJ Hellovision, a CJ unit, with a plan to merge it with SK Broadband.
However, the Fair Trade Commission opposed the one trillion won deal saying it would help SK Telecom strengthen its monopolistic control of the market.
SK has been involved in active mergers and acquisitions since Chey Tae-won officially returned to the leadership of his group in March.
In 2014, Chey stepped down from all key posts after he was charged with funneling group funds into his own personal investment portfolio. In August last year, he was released from prison after he served 31 months out of his 48-month jail term.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
![[UPDATES] Investors react positively to SK Networks bid for for Tongyang Magic](https://image.ajunews.com/content/image/2016/09/28/20160928084056615499.jpg)
