9 Investors Participate... 7 Investors Submit Bids Above Expected Price
New Shareholders to Be Revealed on the 22nd at 2 PM
[Asia Economy Reporter Kim Jin-ho] The sale of the remaining shares of Woori Financial Group has been a 'success.' It has been confirmed that Hoban Construction, Harim, the Woori Employee Stock Ownership Association, as well as existing shareholders such as Korea Investment Financial, participated. However, the IT giant KT, which participated in the preliminary bidding, is reported to have withdrawn its intention to acquire.
According to the Financial Services Commission (FSC) on the 18th, nine investors participated in the 'final bidding for the sale of the remaining shares of Woori Financial Group' conducted by the Public Fund Management Committee (PFMC) under the FSC. According to the market, Hoban Construction, Harim, Korea Investment Financial Group, Dunamu, Eugene PE, the Woori Employee Stock Ownership Association, and ST International submitted bid proposals.
According to the FSC, a total of seven investors submitted bids exceeding the pre-approved expected price set by the PFMC. This is 1.73 times the maximum sale volume (10%). This essentially means that the acquisition competition was a success.
The PFMC plans to announce the final successful bidder selection results on the 22nd at 2 p.m. (tentative) after evaluating the nine investors. A PFMC official explained, "The successful bidder will be decided by partially reflecting non-price factors in addition to price factors," adding, "The proportion of non-price factors will be evaluated according to objective standards and procedures set by the PFMC."
The sale of the remaining shares of Woori Financial Group is a follow-up measure by the PFMC under the FSC, according to the 'Woori Financial Remaining Shares Sale Roadmap' announced in 2019. It is a competitive bidding method to sell 10% of the shares held by the Korea Deposit Insurance Corporation (KDIC) out of 15.13%, with a minimum bid volume of 1%.
The market expects at least three new shareholders to participate. The shares are expected to be divided and purchased by three to four investors, for example, 4%, 4%, and 2% or 4%, 4%, 1%, and 1% each. Under current law, non-financial major shareholders can only hold up to 4% of financial company shares. Exceeding 4% requires passing a stringent major shareholder suitability review by financial authorities.
The market analyzes that the reason many companies have shown interest in the sale of Woori Financial's remaining shares is due to the 'outside director nomination rights' provided as an incentive. Investors who newly acquire more than 4% of shares are granted the right to nominate outside directors of Woori Financial. A financial sector official said, "Compared to other financial holding companies, Woori Financial has fewer outside directors, so the merit is considerable," adding, "Since it is an opportunity to own a commercial bank through equity investment, many companies have participated."
It is also analyzed that the future growth potential of the financial industry, which was hit hard by COVID-19, and the fact that Woori Financial recorded its best-ever performance this year and is expected to continuously increase dividends in the future, acted as attractions from the investors' perspective.
Meanwhile, besides KDIC, Woori Financial Group currently holds shares with the National Pension Service at 9.8%, the Woori Employee Stock Ownership Association at 8.75%, and IMM PE at 5.62%. If the remaining share sale process is completed as planned, KDIC will lose its status as the largest shareholder, and Woori Financial will enter the path of full privatization.
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