Private equity firm Hahn & Company selected as preferred bidder for Lotte Card

By Lim Chang-won Posted : May 3, 2019, 14:39 Updated : May 3, 2019, 14:39

[Aju News DB]


SEOUL -- Hahn & Company, a private equity firm specializing in buyouts, was selected as preferred bidder for a credit card company which has been put up for sale by Lotte, the fifth-largest conglomerate in South Korea, betraying market expectations that the winner would be Hana Financial Group, a major bank holding company.

The group said Friday that it has selected a preferred bidder for Lotte Card after considering the bidding price and non-price factors such as the job security of employees, growth potential, the buyer's management capabilities and cooperation with the group's retail unit.

Hahn & Company will acquire 80 percent of Lotte Card, which has been up for sale as part of efforts to realign the group's corporate structure and enhance governance. The bidding price was estimated at 1.44 trillion won ($1.23 billion).

Hana Financial, which sought the acquisition of Lotte Card to expand its non-banking sector, had been favored following the withdrawal of the Hanwha Group that sparked speculation it was scraping up funds to bid for Asiana Airlines, the country's second-largest flag carrier which was placed on the market together with two low-cost carriers.

Official data showed that Shihan Card controls 21.5 percent of South Korea's credit card market, followed by Samsung Card's 19.3 percent and Hyundai Card's 15.5 percent. Lotte Card accounts for 11.2 percent and Hana Card 8.2 percent.

In October 2017, Lotte Group chairman Shin Dong-bin launched Lotte Corp. and secured firm group-wide control by holding a 13-percent stake in the holding company. The realignment of the group's structure would be completed after the holding company absorbed more affiliates.

JKL Partners, a private equity firm, was selected as preferred bidder to acquire a 58.5 percent stake in Lotte Insurance, which controls a large portion of South Korea's calling card market.

Lotte Corp. holds a 7.1 percent stake in Lotte Insurance and 25.64 percent in Lotte Capital, which is the fourth largest player in South Korea's capital market. The holding company should sell its holdings in financial units -- Lotte Capital, Lotte Card and Lotte Insurance -- by October this year. The sale of Lotte Capital has been delayed.


 
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