April 25, 2024

• 

[THE INVESTOR] Chinese manufacturing giant Linglong Group is likely to continue its bid to acquire South Korean tire maker Kumho Tire despite its tire-making affiliate’s withdrawal from the race last week, Maeil Economic Daily reported on Nov. 28.

Shangdong Linglong Tire, one of the five firms shortlisted for the Kumho Tire buyout, said in a filing on Nov. 26 that it was withdrawing its bid, citing the Korean tire maker’s sluggish business performance. 

But the paper said its parent company Linglong Group would bid through another affiliate, adding that change in buyer is being done to reflect regulatory issues on the Shanghai Stock Exchange.

A total of five bidders, including Linglong Group, Chinese tire maker Qingdao Doublestar, Chinese automotive firm Shanghai Aerospace Industry and Indian tire maker Apollo Tyre, are eyeing a controlling 42.1 percent stake, equivalent to 66.3 million shares, of the company that has been put up for sale by the creditors.

Based on the current stock price, creditors expect the sale to fetch as high as 1 trillion won (US$855.65 million) when management premiums are added.

Kumho Asiana Group Chairman Park Sam-koo is highly likely to exercise his right of first refusal in the sell-off that allows him to repurchase the stake under the same term as the highest bidder, according to industry watchers.

The final bidding process is expected to take place in January next year. 

By Ahn Sung-mi (sahn@heraldcorp.com)