CJ Group and department store operator Shinsegae Inc. have teamed up with IT and financial services group DaouKiwoom in a consortium selected as the preferred bidder for the daily.
The consortium beat five other bidders, including Orion and Global Sae-A, after final bids closed Monday, according to investment banking sources. Samil PricewaterhouseCoopers is overseeing the sale.
The proposed acquisition involves an injection of about 500 billion won ($350 million) through the purchase of newly issued shares. Most rival bids reportedly ranged from 300 billion to 400 billion won.
The selection marks a major step in JoongAng Ilbo’s restructuring, three months after it entered a creditor-led debt workout.
Shinsegae confirmed Tuesday that it was participating alongside CJ. “While respecting JoongAng Ilbo’s distinct identity and expertise, we plan to create synergies by connecting it with our premium cultural platforms and lifestyle content,” the company said.
The ownership split within the consortium has not been disclosed. DaouKiwoom is reportedly expected to take 50 percent, with CJ and Shinsegae sharing the other half.
“DaouKiwoom and the extended Samsung family will go in on a 50-50 basis,” a person familiar with CJ’s position said.
A Shinsegae official, however, disputed a report that CJ and Shinsegae would contribute 30 percent and 20 percent, respectively, saying “the specific figures are different.”
Shinsegae’s participation deepens the deal’s Samsung-family connections.
CJ Chairman Lee Jay-hyun is a grandson of Samsung founder Lee Byung-chull, who established JoongAng Ilbo in 1965. Shinsegae Chairwoman Chung Yoo-kyung is his granddaughter. CJ already holds a 9.24 percent stake in the newspaper through CJ OliveNetworks, making it the third-largest shareholder.
Shinsegae Inc. encompasses the department store business, duty-free operator Shinsegae DF and fashion and beauty affiliate Shinsegae International. It operates separately from the E-Mart-centered businesses led by Chung’s brother, Chung Yong-jin.
JoongAng Ilbo separated from Samsung Group in 1999 and has since been led by the family of Hong Seok-hyun, the brother-in-law of the late Samsung Chairman Lee Kun-hee.
The proposed deal would give the founder’s descendants a larger role in the newspaper 27 years after that separation, although DaouKiwoom would remain the consortium’s lead investor. Some industry observers see the family’s participation as an effort to prevent the newspaper from passing entirely into outside hands.
DaouKiwoom initially pursued the acquisition alone before teaming up with CJ ahead of the final bidding round.
JoongAng Ilbo entered a debt workout in July after prolonged financial difficulties. The process allows it to negotiate with creditors outside court-led rehabilitation. Main creditor Hana Bank is coordinating the restructuring and sale with other lenders.
The acquisition still requires a conditional agreement to purchase new shares, approvals from creditors, bondholders and the newspaper’s board, and payment for the shares. The proceeds would go directly to JoongAng Ilbo to repay debt and strengthen its finances.
Creditors aim to complete the transaction by year-end and bring the newspaper out of its workout.
Copyright ⓒ Aju Press All rights reserved.
