Go to Contents Go to Navigation

E-land's hypermarket sale boils down to three-way race

All News 09:41 February 29, 2016

By Kim Eun-jung

SEOUL, Feb. 29 (Yonhap) -- South Korea's two biggest retailers -- Shinsegae and Lotte -- have joined the bid to take over E-land Group's hypermarket chain to expand their existing store networks, along with U.S.-based private equity firm KKR, industry sources said Monday.

Kim's Club, the nation's fourth-largest supermarket chain with 37 outlets, was put up for sale in November as E-land decided to reduce debt and focus on its fashion and restaurant franchise business.

While the bid initially failed to attract interest from big investors, E-land has recently added the New Core department store located in the posh Gangnam region to the list to sweeten the deal.

According multiple industry sources, Shinsegae, the operator of leading discount chain E-Mart, and Lotte, which owns No. 3 Lotte Mart, have shown interest in the bid on the condition that it includes the sale of the department store.

U.S.-based private equity firm KKR & Co. LP was also included on the list.

E-land said it plans to review their proposals starting Wednesday and pick a preferred bidder next month.

The deal is estimated to fetch up to 2 trillion won (US$1.61 billion), considering the annual sales of Kim's Club and New Core department store.

Shinsegae has reportedly shown keen interest in the deal as New Core is close to its department store, which has recently finished renovation to become Seoul's largest outlet. It also stands at a transportation hub that houses three subway transfer lines and an express bus terminal.

Lotte has eyed the takeover deal to raise its market share at a time of tougher competition with online market places that have waged a cut-throat price competition.

E-Land has launched several SPA (specialty retailer of private label apparel) brands to compete with global fashion giants such as Zara and Uniqlo. It has also expanded its business in the food franchise and leisure sectors, making an aggressive foray into China.

In 2008, E-Land sold French retailer Carrefour's Korean unit amid a sluggish performance in the domestic market.

ejkim@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!