YTN sale gains momentum after state-run firms’ decision to jointly sell stakes

[Courtesy of YTN]

The sale of YTN, South Korea’s first 24-hour news channel broadcaster, is expected to move forward this week with an official notice for the sale.

According to investment banking (IB) sources on Wednesday, state-run IT service management company KEPCO KDN Co., YTN’s largest shareholder, and Korea Racing Authority (KRA) plan to release an official notice for the sale of their YTN stakes on Friday and continue with other formal procedures.

KEPCO KDN holds a 21.43 percent stake in YTN while KRA holds a 9.52 percent stake, and the duo will reportedly hold a preliminary bid around September 23 following the notice. YTN‘s market capitalization was 377.2 billion won ($283.08 million) at its closing price on Wednesday and the estimated value of the shares to be sold is around 116.7 billion won. The sale price is expected to be higher given the management premium.

The country’s Ministry of Economy and Finance decided during a public institution operation committee meeting in November 2022 to divest the entire stake in YTN held by KEPCO KDN and KRA. However, no progress was made due to the low ownership percentages of each organization, making a management premium difficult. In response, KEPCO KDN and KRA decided to jointly sell their stakes to increase the investment attractiveness.

Against this backdrop, the two organizations signed an agreement to jointly sell their stakes in YTN on Tuesday and plans for the sale of publicly-owned shares gained momentum. In addition to the two organizations, YTN’s major shareholders include Korea Ginseng Corp. (19.95 percent), Mirae Asset Life Insurance Co. (14.58 percent), and Woori Bank (7.40 percent), and if the sale is successful, the new owner is expected to provide stable management.

According to investment industry sources, several media companies and corporations have expressed interest in the sale. Financial investors (FIs), who anticipate an increase in YTN’s corporate value, are also considered potential buyers as the broadcaster has many valuable assets, including real estate, in addition to its media business. Considering YTN’s assets such as the N Seoul Tower, YTN Building or YTN Newsquare in Sangam-dong, Seoul, and a reserve fund of around 100 billion won, some estimates suggest that the asset value alone could be over 700 billion won.