Mirae Asset Securities withdraws from acquisition race on Hyundai Securities

Mirae Asset Securities Co., the leading securities firm of South Korea that recently acquired KDB Daewoo Securities Co., has decided to drop out the race for Hyundai Securities Co., raising chances for two major contenders Korea Investment & Securities Co. and KB Financial Group Inc. to win the bid.

An unnamed high ranking official at Mirae Asset Securities said on Wednesday Mirae Asset Securities made a final decision not to participate in the acquisition battle over Hyundai Securities to “prevent any excessive competition surrounding the takeover deal.” Mirae Asset Securities has been said to be mulling taking part in the acquisition race for Hyundai Securities as a strategic investor in partnership with private equity fund operator LK Investment Partners.

Such a news has raised concerns over the possible monopoly by Mirae Asset Securities, the country’s already giant brokerage house following its acquisition of KDB Daewoo Securities, in the local brokerage and IB market, making Mirae Asset back off, said the high ranking official at Mirae Asset Securities. Earlier this month, Mirae Asset Securities agreed with state-run Korea Development Bank (KDB) to buy KDB Daewoo Securities at 2.33 trillion won ($2 billion). If Mirae Asset takes over Hyundai Securities, it could become a titan with 10 trillion won equity capital that could hinder fair competition in the market, the market observers note.

With Mirae Asset Securities dropping out, the bidding battle for Hyundai Securities is expected to heat up between Korea Investment & Securities and KB Financial Group after Hyundai Group requires contenders to pay an upfront deposit of 30 billion won for the main auction, virtually blockading financial investors that do not have enough capital in hand.

Now, eyes are on Hyundai Elevator Co. that expressed its intention to take part in the Hyundai Securities tender race. The company is scheduled to submit its offer on the securities firm on Thursday, one day before the main auction. And if the bidders’ offering prices fall below Hyundai Elevator’s, the sale of Hyundai Securities will likely fall through again.

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