Global Sae-A, OK Financial among six bidders for JoongAng Ilbo

Six parties, including Global Sae-A Group and OK Financial Group have entered the bidding to acquire South Korean daily newspaper JoongAng Ilbo.

According to investment banking industry sources on Monday, Samil PricewaterhouseCoopers, the financial adviser to the sale of JoongAng Ilbo, accepted letters of intent until 3 p.m. The adviser plans to select a shortlist in late September after reviewing the bidders. The goal is to complete the company’s workout program by the end of the year.

JoongAng Ilbo has been seeking to sell management control since entering workout proceedings in July. The initial plan was to sell existing shares held by the controlling shareholder, but JoongAng Holdings Inc., the largest shareholder, is undergoing rehabilitation proceedings, which requires prior court approval for any sale of its shares. Hana Bank, the lead creditor bank, subsequently switched to a new-share issuance.

Hana Bank selected Samil PricewaterhouseCoopers as financial adviser and Yoon & Yang LLC and Yulchon LLC as legal advisers. Earlier this month, it chose a third-party allotment of new shares through a competitive bidding process as the sale method and announced the tender.

Global Sae-A Group owns Jeonju Paper Corp., the country’s largest newsprint producer, and entered the bidding amid the possibility of vertical integration with its paper business, according to industry sources.

The group had been pursuing an outright sale of its paper business with UBS AG as adviser but halted the sale review in June. Global Sae-A began as a clothing original equipment manufacturer (OEM) and has expanded through acquisitions including Tailim Packaging Co. and Ssangyong Engineering & Construction Co.

OK Financial Group has also entered the bidding. The group has been expanding through moves including a recent bid to acquire Yebyeol Non-life Insurance Co. Industry sources also cited potential corporate-image benefits from acquiring a media company.

E-broadcasting Corp., better known as 3Pro TV, and the operator of Namboo Country Club are also understood to have submitted letters of intent.

CJ Group, which had been considered a potential bidder, did not participate. Through CJ OliveNetworks Co., it holds a 9.24 percent stake in JoongAng Ilbo and is a major shareholder. Its decision not to participate is understood to be related to legal restrictions on large companies holding a majority stake in media companies. An investment banking industry source said “CJ informed the parties at the last minute that it would not participate.”