Hynix: No bidders, block sale imminent?

January 29, 2010 – A second window of opportunity to sell a controlling stake in Korea’s Hynix Semiconductor has come and gone with no bidders coming forward, so the company’s investors are looking at other ways to slough off their interest, according to multiple reports.

Domestic conglomerate Hyosung Corp. pulled out last November after being groomed as a potential investor to take a ~28% stake worth about $3B. A second window of opportunity was opened Dec. 20 inviting new bids, but closes Jan. 29, apparently with no takers, according to the state-owned Korea Exchange Bank (KEB). (After a rebound in recent months, that 28% stake would be valued at about $3.3B, perhaps seen as too big a pill to swallow by investors, the Wall Street Journal suggests.)

KEB says shareholders will examine other ways to get rid of their stake, including selling off ownership in chunks. "The stake sale seems an uneasy task, because there aren’t many companies out there that can afford to buy such a big company and as Hynix may need massive amounts of money for its technology migration," said Lee Min-hee, an analyst at Dongbu Securities, quoted by the WSJ. "Maybe the best way the creditors could come up with will be selling their stake in a block trade or selling it to some financial investors from both at home and overseas." Creditors would prefer to entertain inquiries from domestic investors so as to preserve the domestic chip industry, though foreign investors could invest through domestic firms, noted Ryu Jae-han, president of Korea Finance Corp. (KoFC), quoted by the Korea Times.


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