Discover the estimated value of HMM shares, totaling $5.3 billion, and the critical role capital securing plays in selecting the preferred bidder. Stay informed on this high-stakes financial decision.

Bidding Wars: KDB’s Year-End Showdown as Dongwon and Harim Compete for HMM Acquisition

KDB is aiming to finalize the sale process by the end of this year. The acquisition of HMM, a prominent global shipping and logistics company in Korea, has turned into a competition between Dongwon Group and Harim Group. Both companies have officially entered the bidding process, with the winner expected to be announced by the end of this month at the earliest.

Although the usual timeline for selecting the preferred bidder would take another week or two, KDB intends to expedite the process and reach a stock purchase agreement before the year’s end, as stated by a KDB official to The Korea Times.

KDB, along with the Korea Ocean Business Corporation, which are the largest and second-largest shareholders of HMM, plan to conduct a thorough assessment of Dongwon and Harim, evaluating their financial health, management capabilities, and strategic plans for operating the shipping business. Their goal is to announce the preferred bidder no later than early December.

HMM Shares Valued at $5.3 Billion: Key Factor in Preferred Bidder Selection

The estimated sale price for the 398.79 million shares of HMM held by bondholders is around 7 trillion won ($5.3 billion), factoring in the current HMM stock price and the premium for management rights. The primary consideration in selecting the preferred bidder is expected to be their ability to secure the necessary capital for the deal.

Previously, LX International was expected to be a third contender, but it decided to withdraw from the bidding process, citing a strategic assessment that took into account market conditions and other factors. This withdrawal has raised concerns about the completion of the sale, given that LX was perceived to have relatively strong funding capabilities compared to the remaining two bidders.

However, both Dongwon and Harim are determined to stay in the race and have expressed confidence in their ability to mobilize sufficient acquisition funds. Dongwon Group plans to raise capital by selling shares of its major affiliates or securitizing some assets without external financial investors. Harim Group, on the other hand, intends to secure capital through asset securitization and issuance of perpetual bonds, with financial support from JKL Partners, the investor in the acquisition bid.

Both companies see the acquisition of HMM as a strategic move to strengthen their business portfolios and enhance national competitiveness, emphasizing their commitment to the process.

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Source: Maritime Executive