'Sale to China' MagnaChip receives new acquisition offer from UK private equity fund... "Postponement of general meeting"

[Asia Economy Reporter Jeong Hyunjin] MagnaChip Semiconductor, which was pursuing a sale to a Chinese private equity fund (PEF), has received a larger earnest money offer from a British private equity firm and is postponing the existing merger and acquisition (M&A) process to review the new proposal.

According to industry sources on the 14th, MagnaChip recently announced that it is postponing the shareholders' meeting schedule, stating, "We received an unsolicited offer from the UK-based private equity firm Conucopia Investment Partners." The term "unsolicited offer" here means that Conucopia proposed an acquisition of $1.66 billion (approximately 1.853 trillion KRW) to MagnaChip.

MagnaChip was originally scheduled to be sold for $1.4 billion, proposed by the Chinese private equity fund Wise Road Capital, and planned to hold an extraordinary shareholders' meeting on the 15th (local US time) to discuss the matter. Regarding this, MagnaChip stated, "The board of directors will review the newly received proposal after consulting with legal and financial advisors," and announced the postponement of the shareholders' meeting schedule.

With Conucopia's sudden appearance in the MagnaChip sale process, there are expectations that issues such as concerns over technology leakage could take an unexpected turn. MagnaChip, created in 2004 when Hynix Semiconductor (now SK Hynix) spun off its system business division, was acquired by Citigroup Venture Capital and listed on the New York Stock Exchange (NYSE) in 2011. It currently holds core technologies such as display driver ICs (DDI) for organic light-emitting diode (OLED) displays.

Accordingly, when news spread in March that MagnaChip would be sold to China's Wise Road, concerns over semiconductor technology leakage increased. The US Committee on Foreign Investment in the United States (CFIUS) also reviewed the deal, leading to analyses that MagnaChip was caught between the US and China, who are competing for technological supremacy. Subsequently, the Ministry of Trade, Industry and Energy designated the related technology as a national core technology.

A MagnaChip official said, "The MagnaChip board has not yet reached a conclusion on the review, and there is no change in the recommendation to adopt the existing sale contract agreement to shareholders," adding that the rescheduled shareholders' meeting time will be announced on the 15th.