Wins International Arbitration

MBK Partners will receive about 200 billion won back from Tesco in the U.K.

MBK Partners, which owns Homeplus, a Korean discount store retail chain, will receive about 200 billion won back from Tesco in the U.K.

The London Court of International Arbitration recently told Tesco, the previous owner of Homeplus, to refund the discount store chain £119 million, or 200 billion won.

Homeplus was sold to MBK Partners for about 7.2 trillion won in 2015. Since the signing of the stock purchase agreement (SPA), Tesco and MBK Partners have been arguing over the acquisition price of Homeplus and accounting issues.

MBK Partners measured the company's corporate value based on the Korean accounting standards. On the other hand, Tesco insisted that the discount store chain’s corporate value be measured based on its own accounting standards.

In the end, as Tesco claimed, the final acquisition price was decided at 7.68 trillion won, reflecting the U.K. company's own accounting standards. The total enterprise value (EV) is the sum of the 5.8 trillion won that MBK paid to acquire 100% of Homeplus shares and the 1.8 trillion won of debt Homeplus owed.

MBK Partners filed an international arbitration claim that Tesco underestimated Homeplus' debt and overestimated the sale price during the sale process. Yet, Tesco argued that it was correct to calculate the debt according to its own standards. However, the London Court of International Arbitration sided with MBK Partners.

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