As all six companies on the shortlist for the acquisition of JoongAng Ilbo have submitted their bids, Meritz Securities has also entered the race under the pretext of providing financial support. It has joined hands with E-Broadcasting, which is considered a strong contender for 'Sampro.' With Dow Keum Group, which formed a consortium with CJ Group, being mentioned as the leading preferred negotiation candidate, Meritz's entry has intensified the competition in the final stages.
According to investment banking (IB) industry sources on the 19th, all shortlisted acquisition-eligible candidates, including Daou Technology, Orion, Global Sear, OK Financial Group, E-Broadcasting, and Geumbo Development, expressed their intent to participate in the final bidding conducted by the sale manager Samil PwC until that afternoon. Taekwang Group, which did not participate in the preliminary bidding, was expected to explore direct entry into the final bidding by forming a consortium, but this reportedly fell through.
The sale price of JoongAng Ilbo is reported to be in the 500 billion won range. The process is expected to proceed in the form of acquiring newly issued shares from JoongAng Ilbo's rights offering (paid-in capital increase).
The market views the core of this deal as debt repayment capacity. Currently, JoongAng Ilbo's total short- and long-term borrowings and corporate bond scale amount to 350 billion won. The scale of corporate bonds maturing by February next year alone is 62.4 billion won. For the entire next year, a total of 129.4 billion won worth of corporate bonds will reach maturity.
Companies participating in the final bidding are engaging in fierce end-stage competition, leveraging their acquisition capacity and business synergies. CJ and Dow Keum Group are mentioned as the most likely acquisition candidates. Observations have been raised that the two companies will acquire shares by splitting them equally. CJ Group currently holds a 9.24% stake in JoongAng Ilbo through CJ Olive Network. CJ Olive Network ranks as the third-largest shareholder, following Central Holdings (64.73%) and Hong Suk-hyun, Chairman of Central Holdings (15.63%).
E-Broadcasting, which has Sampro TV as its main business, is drawing attention as a new media player. Meritz Securities has added strength by stepping in with financial support. It is highly likely that Meritz Securities will loan the funds to be invested in the rights offering (paid-in capital increase).
In addition, Global Sear Group, the largest shareholder of Jeonju Paper, the top business operator in newsprint, is expected to generate revenue by creating synergies in newspaper publishing. Orion also has experience in the media industry as it owns Showbox, a film investment and distribution company, as an affiliate. However, activist funds are opposing Orion's acquisition of JoongAng Ilbo, so it appears that Orion will need to present a response plan.
The industry views that the process of selecting the preferred negotiation candidate in the JoongAng Ilbo acquisition race will proceed faster than expected. However, after the selection of the preferred negotiation candidate, further discussion is needed regarding how much of the new share subscription price should be raised as funds for improving the company's financial structure.
Coordination with the JoongAng Ilbo labor union on acquisition conditions is also necessary. The JoongAng Ilbo labor union is demanding 10 major principles from the acquirer, including a ban on concurrent positions in management and editorial roles, a prohibition on artificial restructuring, employment succession, the principle of minimizing acquisition financing, the enactment of an editorial charter, and the establishment of independent bodies.
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