Orix gives up bid to buy Hyundai Securities

By 신현희
  • Published : Oct 19, 2015 - 22:47
  • Updated : Oct 19, 2015 - 22:47

apanese private equity firm Orix has given up its bid to buy Hyundai Securities Co., local financial sources said Monday.

According to insiders, Orix informed Hyundai Group, which had placed the brokerage firm on sale, that it will not extend negotiations designed to purchase the company, without disclosing further details.

Hyundai Group, which wants to sell the securities firm as part of a wider 3.3 trillion won ($2.9 billion) restructuring effort to reduce the conglomerate's debt, had a so-called long-stop date arrangement that could allow the transaction process to be terminated if no transaction was reached as of last Friday.

The latest development comes after Hyundai Securities inked a deal in June that calls for the creation Orix PE Korea that could buy 22.56 percent of the brokerage's stakes for 647.5 billion won.

Originally, the deal should have been concluded last month, but there had been delays caused by the need to provide more documentation.

Market watchers said that the Japanese firm may have opted not to buy the securities firm in light of negative publicity in South Korea surrounding such a transaction. There has been growing opposition to a foreign company buying a local brokerage firm, with politicians moving to make an issue of the matter.

South Korea's financial regulators, meanwhile, said they have not received any formal notification from Orix that they were pulling out, although a regulatory filing has been made on the latest move.

Orix and a South Korean private equity company made a bid for the securities firm in January, with each bidder estimated to have offered more then 1 trillion won.

Failure to conclude the transaction is expected to restart talks to sell Hyundai Securities.

Hyundai Securities is expected to hold talks with Korea development Bank, that has been overseeing the deal, to devise what it will do next. (Yonhap)