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SK Networks denies Coway buyout rumor

SK Networks has denied reports that it will bid to buy Korean water and air purifier-maker Coway, a deal valued at about 3 trillion won ($2.5 billion).

“We have received a teaser letter sent en bloc by Coway’s biggest shareholder MBK Partners to potential buyers. But we have no plan to join the bid,” SK Networks said Wednesday.

MBK Partners, the largest shareholder of Coway with a 30.9 percent stake, in August hired U.S. investment bank Goldman Sachs to broker the sale.

As to separate speculation that it would take over cable TV broadcaster C&M, it said, “We have never talked to its largest shareholder MBK nor have we considered its acquisition.”

A local daily said early Wednesday morning that the SK Group subsidiary, whose business ranges from the distribution of energy to resource development and trade, is seeking to buy C&M and Coway.

SK chairman Chey Tae-won’s return to management in August further added to the speculation that he will make bold decisions like mergers and acquisitions to enlarge the company.

In fact, SK Networks has sought to expand its business areas through active M&As, focusing on automobile, duty-free and fashion businesses as fresh growth engines.

In May, SK acquired local fashion brand Steve J & Yoni P, and has inked a licensing deal with U.S. casual apparel firm American Eagle to introduce the brand in Korea.

Meanwhile, Dutch company Philips is reportedly interested in taking over the purifier company, according to industry sources. Philips is said to have requested more information about the takeover deal after receiving the teaser letter from Goldman Sachs.

The sale price is regarded to be unaffordable by most Korean firms except SK Networks, said an analyst from Daishin Securities.

“The sale price is almost two or three times higher than it was valued in 2012, when Woongjin sold it to MBK Partners. Although the deal is attractive enough, its price tag is the biggest barrier for most local firms,” he said.

By Suk Gee-hyun (