Daou Kiwoom-CJ Consortium Selected as Preferred Negotiating Party for JoongAng Ilbo Acquisition

Samil PwC: "Comprehensive evaluation of bid amounts and other factors"
Proceeds from new share issuance to be used to repay debt

A consortium of Daou Kiwoom Group and CJ Group has been selected as the preferred negotiating party for the merger and acquisition of JoongAng Ilbo. The decision comes about three months after the company entered a workout program.

JoongAng Ilbo-JTBC headquarters/Provided by JoongAng Group. Yonhap News Agency

JoongAng Ilbo applied for a workout program with its main creditor bank, Hana Bank, last June after its credit rating was downgraded in the wake of debt defaults by JTBC, another company in the same group. On July 10, creditors approved the start of the workout program with the consent of more than 75% of the outstanding claims. JoongAng Ilbo has since sought a new majority shareholder through an open competitive bidding process involving a paid-in capital increase through a third-party allotment.

Samil PwC, the lead manager for the sale, announced on October 19 that the consortium of Daou Kiwoom Group and CJ Group had received the highest score among the bidders in the final round. Six parties took part in the bidding: the Daou Kiwoom Group-CJ Group consortium, Orion, Global Sae-A, OK Financial Group, e Broadcasting, and Geumbo Development. The consortium is said to have offered around KRW 500 billion, while most of the other bidders reportedly offered between KRW 300 billion and KRW 400 billion. Samil PwC said it evaluated the bids comprehensively, considering the offer price, ability to raise funds, expected improvements to the company's financial structure, enhancement of the public value of the media, employment stability, and future investment.

The acquirer will become the largest shareholder by purchasing newly issued shares from JoongAng Ilbo. The proceeds from the share sale will go directly to the company and be used to repay debt and fund other efforts to restore normal operations. Samil PwC said the structure was designed to protect the interests of creditors and investors as much as possible, adding that the acquisition price was large enough to significantly improve JoongAng Ilbo's financial structure.

After signing a conditional share subscription agreement (SSA), the Daou Kiwoom Group-CJ Group consortium will complete the acquisition process in the following order: approval by the financial creditors' council, a bondholders' meeting, approval by the JoongAng Ilbo board of directors, and payment of the subscription price. The specific schedule may change depending on discussions with creditors. JoongAng Ilbo said, "We will do our utmost to complete the workout and graduate from the program within the year."

JoongAng Ilbo says it can return to growth once it overcomes the current financial crisis, pointing to its 13 consecutive years of operating profits. Once the new governance structure is in place, the company plans to focus on strengthening its content competitiveness.

This content was produced with the assistance of AI translation services.