Prolonged TMEF Sale: Will It Shift to a Public Auction?

The search for a new owner of TMON and WEMAKEPRICE (hereinafter referred to as TIMEP) has stalled, leading to changes in the sale method. There is an increasing possibility that the sale will be pursued through a public bidding process without prior securing of a buyer. However, industry insiders believe that difficulties will persist due to the burden of the sale price and intensified competition in the e-commerce market.

The Black Umbrella Emergency Committee for the successful M&A of Timon and Wemakeprice (Timaf) business resumption held a briefing session with the court-appointed administrator on the 4th at Timon's headquarters meeting room in Gangnam-gu, Seoul, attended by victims, related parties, and reporters. Jo In-cheol, the court-appointed administrator and Timaf operations director, is explaining the progress. Photo by Heo Young-han

원본보기 아이콘

According to the investment banking (IB) industry on the 25th, EY Han Young, the lead manager for the TIMEP sale, is considering switching to a public sale if no interested buyers emerge. Judging that the schedule cannot be delayed any further, they plan to approach companies that have not yet been contacted to gauge their interest in acquisition. Initially, TIMEP’s sale was being pursued through a stalking horse method, which involved selecting a preferred bidder first and then conducting a public bidding to increase the speed and stability of the deal.

The background for considering the switch to a public sale is the difficulty in finding a buyer for TIMEP. TIMEP had previously negotiated with the goal of selecting a preferred bidder between late January and early February but failed to find a suitable acquirer. As a result, the deadline for submitting the rehabilitation plan was extended from the 7th of this month to the 7th of next month. This is the second extension following the initial extension from January 17th. EY Han Young is currently in talks with several potential buyers, including Oasis, and plans to extend the deadline once more if no buyer emerges.

An IB industry official explained, “If no potential buyer appears, we will inevitably have to proceed with a public competitive bidding,” adding, “This indicates that TIMEP is not an attractive asset.”

However, the industry expects that even if a public bidding takes place, difficulties in finding a buyer will continue. TIMEP’s minimum sale price is reportedly higher than its liquidation value (TMON 13.6 billion KRW, WEMAKEPRICE 13.4 billion KRW). A representative from a major accounting firm explained, “This means the amount investors have to bear is high, making the hurdle higher compared to other deals.”

The overheated e-commerce market situation is also an obstacle. Another industry insider said, “With Chinese companies like Temu entering the domestic market, competition in the e-commerce sector is intensifying. Considering that TIMEP was already at a disadvantage before the rehabilitation process, potential acquirers are likely to have many concerns about whether they can outperform competitors.”

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.