Competition for Kumho Tire
Kumho Tire announced that it selected Doublestar, a Chinese tire manufacturer, as the preferred bidder for the acquisition of itself. At present, Doublestar ranks 30th or so in the global tire industry and the Chinese company recently raised a private equity fund of approximately 1.7 trillion won to take over Kumho Tire. It is said that Doublestar mentioned an acquisition price of one trillion won for its bidding.
The number of Kumho Tire shares owned by creditors and scheduled to be sold at this time is 66,368,844, equivalent to 42.01% of the total. The creditors consist of nine financial institutions, including Woori Bank (14.15%), the Korea Development Bank (13.51%), KB Kookmin Bank (4.16%) and the Export-Import Bank of Korea (3.13%).
They are going to sign a stock purchase agreement with Doublestar late next month and inform Kumho Asiana Group chairman Park Sam-koo of the terms of the agreement including the acquisition price. This is to check the intent of the chairman, who has the right of first refusal and is highly likely to exercise it.
The key point of the competition between the chairman and the Chinese tire manufacturer is whether the former can raise a sufficient fund. He has the right of first refusal with his eldest son, CEO Park Se-chang, as an individual and, as such, he has to prepare money without the aid of Kumho Asiana Group subsidiaries. In order to get back the company, the chairman has to suggest a price of more than one trillion won to the creditors.