[THE INVESTOR] Local blue chip investors including the National Pension Service, Kyobo Life and Mirae Asset Group are considering buying minority stake in Woori Bank as the government is once again pursuing its privatization.

Among them, Kyobo Life is reportedly seeking consultation from M&A advisors amid rumors that the insurer is out to buy a 4-8 percent stake in Woori Bank, according to investment bank sources on Sept. 5.

The state-run Korea Deposit Insurance Corp. -- the largest shareholder of Woori Bank, put up 30 percent of its 51.08 percent stake for sale in August to privatize the bank. The stake would be divided into parts, with the ceiling set at 8 percent. 



This marks the fifth time since 2010 that the government is pursuing privatization of the bank.

“Kyobo is reportedly considering buying additional shares in Woori to eventually take over managerial control,” said one IB analyst, declining to be identified.

In 2014, Kyobo had dropped its bid for Woori Financial at the last minute.

Eventually, the bidding itself was declared invalid due to technical reasons.



PEFs, institutional investors eye stake


Local and foreign private equity funds, along with institutional investors, are also eying a stake, according to industry watchers.

From overseas, Carlyle Group, Affinity Equity Partners, Baring PEA are reportedly taking an interest.

At home, MBK Partners -- known for its investment in Korean water purifier manufacturer Coway -- is also weighing a bid.

“Up to six or seven PEFs have shown an interest,” said one source close to sale.

The biggest attraction Woori has for these financial investors is that it is undervalued.

Woori Bank’s recent share price was around 11,000 won (US$9.83), which is only 0.4 times its price-to-book ratio.

As a further incentive, the government has recently declared that it would endow rights to recommend outside directors, who in turn would be given absolute rights to appoint the bank president.

This has drawn the attention of major institutional investors such as Mirae Asset Group, NPS and Korea Post.

One stumbling block for the sale, however, is that the government would still be holding more than a 10 percent stake in the bank, meaning it could continue to stick an oar into the management.

All bidders must submit a letter of intent by Sept. 23.

By Kim Ji-hyun (jemmie@heraldcorp.com)