The race to acquire the Kumho Tire Co. is coming to a close with China’s Qingdao Doublestar Tyre Co. reportedly being selected as the preferred bidder for the controlling stake of Kumho Tire Co.
However, Kumho Asiana Group Chairman Park Sam-koo still has a chance to buy back Kumho Tire. Park has right of first refusal to repurchase the Kumho Tire stake, which allows him to match the highest bidder’s price and terms to reacquire Kumho. Many Asian media outlets have speculated that it’s not likely Park will have enough funds to make the purchase, but Park is not yet out of the race.
A group of creditor banks, including Korea Development Bank, started taking bids for their 42% stake in Kumho Tire in September and are expected to make their final decision by Jan. 18.
According to the Rubber Asia Journal, three Chinese companies formally offered to buy the 42% stake in Kumho: Doublestar, Shanghai Aerospace Industry Co. and Jiangsu GPRO Group Co., The publication further reported that Doublestar formed a private equity fund for the bid and reportedly offered 1 trillion won (about $857 million) to buy Kumho.
The Nikkei Asian Review also supports these claims, with a Korea Development Bank spokesman telling the publication, “Our lead manager Credit Suisse picked up Doublestar as a preferred bidder. The company bet about 1 trillion won on the deal…I think creditors will nod [to] the deal.”
The Chinese state-owned aerospace and automotive firm Shanghai Aerospace Industry Co. was originally reported to have placed the highest bid to acquire Kumho Tire in late November and was reportedly competing with Doublestar, Apollo Tyres, Linglong Group, and Jiangsu GPRO Group Co.
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