ARA Korea likely to be picked as preferred bidder to buy Conrad Seoul

[Photo by MK DB]

The sale of Conrad Seoul, a five-star hotel located in the financial district of Yeouido in Seoul, is picking up speed, with speculation that ARA Korea Ltd. will be chosen as the preferred bidder.

According to multiple sources from the investment banking industry on Thursday, ARA Korea, a private equity firm, is most likely to be named as preferred bidder to buy Conrad Seoul from Brookfield Asset Management Inc., a Canadian alternative investment firm.

The sale, which is estimated to be worth about 400 billion won ($318 million), is being led by Jones Lang LaSalle IP Inc.

Several bidders, including ARA Korea, The Blackstone Group, and Gravity Asset Management, submitted bids in the second round held in February.

“ARA Korea is known to have proposed the most appealing deal structure,” said an industry official.

In 2016, Brookfield Asset Management bought International Finance Center (IFC) Seoul, a landmark commercial building in Yeouido, from AIG for 2.55 trillion won. Conrad Seoul is located within the IFC Seoul area.

Brookfield Asset Management invested 750 billion won in equity capital and received 1.8 trillion won in acquisition financing loans.

Brookfield Asset Management plans to raise the acquisition finance loan to 2.7 trillion won, which will allow it to recoup 750 billion won in equity capital. The sale price of the entire IFC Seoul is estimated to be in the lower 4 trillion won range, which could lead to a profit margin of 1.3 trillion won.

The sale of Conrad Seoul is seen as the first step to sell IFC Seoul. Brookfield Asset Management had attempted earlier to sell the whole building but ended up in failure.