LF Group picked as preferred bidder for Koramco

South Korea’s fashion retailer LF Group has moved a step closer to becoming a new owner of Koramco Reits Management and Trust Co., the country’s third-largest real estate trust company, after it was named as the preferred bidder for the trust company.

According to multiple industry sources on Friday, LF Group was chosen as the preferred bidder to buy a combined 46 percent stake in Koramco Reits Management and Trust for an estimated 160 billion won ($143 million). The shares include a 5.43 percent stake owned by Koramco founder and former finance minister Lee Kyu-sung.

LF Group aims to sign a stock purchase agreement for the acquisition after conducting due diligence for a month. Koramco Asset Management Co., a wholly-owned subsidiary of Koramco Reits Management and Trust, will also be included in the takeover.

LF Group was established in 2007 after Koo Bon-keul, grandson of late LG Group founder Koo In-hwoi, spun off LG International Corp.’s fashion business unit. LF Group not only owns apparel brands Daks, Lafuma, Maestro, and Hazzys but also retail business in food, cosmetics, outlets, and online mall sectors.

With the addition of Koramco, the company aims to groom fashion/retail and property finance as its two pillar businesses. To complete the goal, LF Group is known to be seeking to buy additional shares in Koramco Reits Management and Trust held by financial companies Woori Bank (12.2 percent), Korea Development Bank (11.7 percent), Kiwoom Securities Co. (9.94 percent), Korean Reinsurance Company (9.68 percent), and Shinhan Bank (7 percent), according to industry sources.

Koramco Reits Management and Trust is one of the country’s top three real estate investment trust companies, and it was founded by former finance minister Lee as Kocref in 2001 with investment from other financial companies and minority shareholders. The company raised 66.1 billion won in operating income on sales of 124.1 billion won in 2017. It is currently chaired by former Korea Exchange Bank president Yun Yong-ro and will continue to be run independently after the acquisition.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]