Korean mid-sized companies eye YTN acquisition

[Courtesy of YTN]

Several South Korean mid-sized companies, including Global Sae-A, Kolmar Korea, and newspaper publishers including Kukmin Ilbo and Hankook Ilbo, are reportedly considering acquiring YTN, the country’s major news network which was put up for sale last week.

Currently, YTN is jointly owned by Korea Electric Power Data Network (KDN) with a 21.43 percent stake and Korea Racing Authority with 9.52 percent. The two state-owned entities jointly decided to sell their combined 30.95 percent stake and announced their intention to accept bidding applications up until mid to late October.

As of the last trading day, Kosdaq-listed YTN had a market capitalization of 413.3 billion won ($310 million), with the 30.95 percent stake on the market estimated to be worth over 127.9 billion won.

Among the potential acquirers, Global Sae-A has drawn attention in recent years for acquiring various companies, including STX Offshore & Shipbuilding’s plant division, Taerim Packaging, and SsangYong Engineering & Construction. It is considered a leading candidate to acquire the network.

Other companies who are potential bidders for YTN include Kolmar Korea, Nongshim, and Dongkuk Steel, among others. However, all the companies denied any involvement in the acquisition.

YTN is known for having valuable assets beyond its media business, including the Seoul Tower and real estate. This has led to speculation that financial investors and consortiums could emerge as participants in the acquisition to leverage these valuable assets.

The sale of YTN is being facilitated by Samil PwC, which plans to send teaser letters to potential bidders in September and October. The formal bidding process is expected to take place in late October.

Any acquisition of YTN requires approval from the Korea Communications Commission (KCC) for a change in the largest shareholder. When factoring in the contract signing and regulatory approval process, the transaction is expected to take about two to three months to complete. Market experts anticipate that the sale could be finalized by the end of this year or early next year.

YTN reported an operating profit of 5.3 billion won over sales of 152.1 billion won for the 2020 fiscal year.