Daou Kiwoom-CJ Consortium Named Preferred Negotiating Party for "JoongAng Ilbo Acquisition" (Updated)

Beats Five Other Bidders, Including Sampro TV and Global Sae-A
Acquisition Price Said to Be Around KRW 500 Billion
Aiming to Complete Restructuring by Year-End

A consortium comprising Daou Kiwoom Group and CJ Group has been selected as the preferred negotiating party to acquire management control of JoongAng Ilbo. The selection comes about three months after the company entered a corporate restructuring program in July.

According to investment banking (IB) industry sources on October 19, Samil PwC, the lead manager for the sale of JoongAng Ilbo, evaluated the final-bid proposals, which were due at 3 p.m. that day, and selected the Daou Kiwoom-CJ consortium as the preferred negotiating party.

All six shortlisted bidders took part in the final bidding: Daou Kiwoom Group, Orion, Global Sae-A, OK Financial Group, E Broadcasting, the operator of the Sampro TV channel, and Geumbo Development. The seller began evaluating the bids immediately after the deadline and announced the results the same day.

CJ, absent from preliminary bidding, joins just before final bids and changes the race

Yonhap News

The biggest variable in the acquisition race was CJ Group's entry. CJ Group did not participate directly in the preliminary bidding, but emerged as a strong contender after joining forces with Daou Kiwoom Group, which had been pursuing the acquisition on its own ahead of the final bidding. CJ Group reportedly chose Daou Kiwoom Group as its partner after contacting other potential buyers as well last week.

Restrictions on ownership stakes under the Newspaper Act are also said to have influenced the two groups' alliance. Business groups subject to cross-shareholding restrictions cannot own more than 50% of the shares in a general daily newspaper, limiting the ability of a single group to secure management control on its own. CJ Group already owns a 9.24% stake in JoongAng Ilbo through its affiliate CJ OliveNetworks. It is the company's third-largest shareholder on an individual shareholder basis, behind JoongAng Holdings (64.73%) and Hong Seok-hyun, chairman of JoongAng Holdings (15.63%).

Daou Kiwoom Group is a finance and IT group best known among individual investors for Kiwoom Securities. The group began in 1986, when former chairman Kim Ik-rae founded the IT company Daou Technology, and entered the financial sector in 2000 with the establishment of online brokerage Kiwoom Securities. It later expanded its financial affiliates to include Kiwoom Investment, Kiwoom Asset Management and Kiwoom Savings Bank. It also operates nonfinancial businesses, including the recruitment platform Saramin and the webtoon and web-novel platform KidariStudio.

Acquisition price estimated at 500 billion won... Targeting completion of restructuring by year-end

The acquisition price proposed by the Daou Kiwoom-CJ consortium is estimated to be in the 500 billion won range. Most of the other bidders are said to have offered between 300 billion and 400 billion won. Samil PwC said it evaluated the acquisition price, financing capabilities, expected improvements to the company's financial structure, the public interest role of the media and employment stability, among other factors. However, analysts say the price difference may have decided the outcome, as creditors placed greater weight on quantitative assessments, including price, to reduce the risk of disputes over fairness.

The transaction will take the form of a third-party allotment of new shares. The buyer will acquire newly issued shares in JoongAng Ilbo, and the proceeds will go directly to the company, rather than to its existing major shareholders, to be used for purposes such as debt repayment and improving its financial structure. The arrangement will simultaneously provide new capital and transfer management control.

JoongAng Ilbo's short- and long-term borrowings and bonds total 350 billion won. Of this amount, 62.4 billion won in corporate bonds will mature by February 2027, while the total amount coming due over 2027 will reach 129.4 billion won. The company needs a rapid capital injection.

The Daou Kiwoom-CJ consortium plans to complete the acquisition process by first signing a conditional share subscription agreement (SSA), followed by approval from the financial creditors' council, a bondholders' meeting, a JoongAng Ilbo board meeting and payment for the shares. The specific schedule may change depending on discussions with creditors, but Hana Bank, the lead creditor bank, and the other creditors are targeting completion of the restructuring program by the end of 2026.

JoongAng Ilbo said, "We will use this M&A as an opportunity to turn adversity into advantage and focus our efforts on strengthening our content competitiveness." It added, "Once the new governance structure is established, we plan to further boost content innovation and management efficiency."

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