Woori Financial's Valuation Soars, New Shareholder Arrival D-6... Bidding Competition Heats Up

Intense Competition Among 18 Preliminary Candidates Including KT and Hoban Construction
Right to Recommend Outside Directors with 4% Stake
Stock Price Soaring 24% in Two Months Draws Attention as a Variable

[Asia Economy Reporter Kim Jin-ho] The financial sector's attention is focused on the success of the sale of the remaining shares of Woori Financial Group. Contrary to initial market concerns that the sale would not be easy, the appearance of 18 preliminary candidates has heightened enthusiasm, leading to unprecedented expectations for Woori Financial Group's complete privatization.

According to financial authorities and the financial sector on the 16th, the Korea Deposit Insurance Corporation (KDIC) will accept final bids for the sale of Woori Financial Group's remaining shares on the 18th. If there are no variables, the successful bidder will be announced on the 22nd after a thorough evaluation of the bidders. Financial authorities have indicated that KDIC is expected to roughly disclose the companies interested in acquisition after the final bid submission deadline on the 18th.

This share sale is a follow-up measure by the Public Fund Management Committee (PFMC) under the Financial Services Commission, based on the 'Woori Financial Group Remaining Shares Sale Roadmap' announced in 2019. The sale will be conducted through a competitive bidding process, selling 10% out of the 15.13% stake held by KDIC, with a minimum bid quantity of 1%. The actual sale volume may vary depending on the bidding results.

A total of 18 companies from various industries, ranging from telecommunications and construction to cryptocurrency exchanges, participated in the Letter of Intent (LOI) submission, which closed on the 8th of last month. Specifically, leading domestic companies such as KT, Hoban Construction, Dunamu, and Harim Group, as well as private equity firms like Eugene PE and Glenwood PE, expressed acquisition intentions. Existing shareholders including the Woori Employee Stock Ownership Association, Taiwan's Fubon Financial, and Korea Investment & Securities also joined the bidding.

The market analyzes that the significant interest from many companies in the sale of Woori Financial Group's remaining shares is due to the 'outside director nomination rights' provided as an incentive. Investors acquiring more than 4% of the shares newly are granted the right to nominate outside directors of Woori Financial Group. A financial sector official said, "Compared to other financial holding companies, Woori Financial Group has fewer outside directors, making this a considerable merit," adding, "Since this is an opportunity to own a commercial bank through equity investment, many companies have participated."

However, there are also views that the recent sharp rise in Woori Financial Group's stock price could become a 'variable' in the share sale. There are concerns that many investors may withdraw from the final bidding due to the burden of the increased price.

Woori Financial Group's stock price has risen 24.5% over two months since the sale announcement. The closing price on September 9, the announcement day, was around 10,800 KRW, but as of the previous day, it was 13,450 KRW. Accordingly, the estimated sale amount for the remaining 10% stake, initially valued at 770 billion KRW, has increased to 940 billion KRW. The amount needed to acquire a 4% stake has risen from about 300 billion KRW to about 400 billion KRW.

Nonetheless, considering the significant growth potential of the financial industry, which was hit hard by COVID-19, and Woori Financial Group's record-breaking performance this year with expectations of continuous dividend increases, the investment remains attractive from the perspective of prospective investors. Securing outside directors to participate in financial company management and create synergy is also cited as a factor driving enthusiasm.

The market expects the final bidding on the 18th to reveal the profiles of 'genuine' and 'nominal' investors. KDIC is likely to sell the 10% stake to 3 to 4 investors (two with 4% stakes and one or two with 1% stakes). Currently, Korea Investment & Securities, Taiwan's Fubon Life, and KT, which have strategic alliances with Woori Financial Group and already hold around 4% stakes, are classified as 'genuine' investors. The remaining 1% stake is likely to be sold to the Woori Employee Stock Ownership Association, which has a strong intention to participate. A representative of the Woori Employee Stock Ownership Association said, "Although the increased amount compared to the sale announcement is a burden, we strongly hope to acquire about 1% of the shares."

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