April 20, 2024

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Seoul-based Hansol Paper walked away from an acquisition bid for corrugated box maker Tailim Packaging and cardboard maker Tailim Paper, the company revealed in an Aug. 27 disclosure.

“Contemplating on the Tailim acquisition deal as its potential bidder, we decided not to join the final bidding round,” the 55-year-old paper maker said in a regulatory filing. Hansol Paper, an affiliate of Hansol Holdings, was one of five bidders shortlisted through a preliminary bidding round in June. 

Corrugated boxes made by Tailim Tailim

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The announcement came hours after the final bidding took place for the bundled deal, said to be worth 1 trillion won ($823.4 million) combined.

Seoul-based investment house IMM Private Equity earlier this year put up for sale its 70.9 percent stake in Tailim Packaging and 100 percent stake Tailim Paper.

Hansol Paper had earlier expressed interest in acquiring both Tailim and Jeonju Paper, a pulp company dedicated to newsprint. Hansol Paper’s cash at hand stood at 20.5 billion won as of the second quarter, but it has yet to publicly consider raising capital.

Hansol Paper was one of the bidders shortlisted in the preliminary round in June, along with Shanying International Holdings, Bain Capital, TPG Capital and Sae-A Trading. Bid managers are expected to choose a preferred bidder by next week.

Tailim Packaging, trading on the main bourse Kospi, fell 4.8 percent Aug. 27.

Tailim is one of the leading corrugated cardboard box makers in South Korea, along with Daeyang Paper Manufacturing. They compete with Asia Paper Manufacturing, Korea Export Packaging Industrial and Sambo Corrugated Board.

The bundled deal has gained traction, partly on anticipation that a profit boost from a price drop in domestic paper waste due to China’s 2018 import ban and a rising logistics industry here will continue for the time being.

By Son Ji-hyoung (consnow@heraldcorp.com)