Was the 500 Billion Price Gap a Burden? Unusual Rebid for Daewoo Construction Sale

Eulji Twin Tower exterior view.

The sale process of Daewoo Construction, which completed the main bidding last week, is entering a re-bidding phase on the 2nd due to unclear reasons.

According to the real estate and investment industry on the 1st, KDB Investment, the largest shareholder of Daewoo Construction, decided to conduct a re-bidding on the 2nd targeting two parties that participated in the main bidding: the consortium of Jungheung Construction and DS Networks.

In the main bidding held until the 25th of last month, Jungheung Construction reportedly offered a purchase price of 2.3 trillion won, about 500 billion won higher than the competing DS Networks consortium. The atmosphere was that Jungheung Construction would be selected as the preferred negotiator, but the mood changed abruptly. It was rumored that Jungheung Construction felt burdened by the acquisition due to the large price gap with the DS Networks consortium.

KDB Investment, which is firmly committed to the sale within this year, appears to have decided on the re-bidding to prevent the worst-case scenario where Jungheung Construction might give up the acquisition. Since giving Jungheung Construction an opportunity to adjust the price could be seen as preferential treatment, the re-bidding including the DS Networks consortium was brought out as a last resort from the perspective of fairness.

In the industry, criticism has arisen over this re-bidding decision, saying "the sale process was reversed without principles." This is because while re-bidding due to a low offered price happens, it is unusual to have a re-bidding because the offered price was high.

An industry insider said, "It seems to be a reckless move reflecting KDB Investment's situation, which wants to sell at the highest possible price within this year." He added, "It seems to be the first time to have a re-bidding later because the price was high after the letter of intent was already submitted," and "Even if the sale is completed through re-bidding, future controversies are inevitable." He reiterated, "It seems to be a reckless move reflecting KDB Investment's situation, which wants to sell at the highest possible price within this year."

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