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| Woori Financial Group Chairman Yim Jong-ryong speaks during a meeting with Financial Services Commission Chairman Kim Joo-hyun in Seoul, March 31. Yonhap |
By Lee Min-hyung
Woori Financial Financial Group is forecast to accelerate a bid for the acquisition of a mid-tier securities firm ― either SK Securities, eBest Investment & Securities or Yuanta Securities ― under the leadership of the group's new Chairman Yim Jong-ryong, industry officials said Monday.
eBest and SK Securities are owned by private equity funds (PEF) that are specialized in the sale of acquired companies. Yuanta Securities has also long been considered Woori's best target for acquisition due to its competitiveness in retail finance, but the company denied the rumor late last year, saying it "does not have plans to sell its stake."
Woori has more room for negotiation with SK Securities and eBest. J&W Partners purchased a 10 percent stake in and management rights for SK Securities in 2018. eBest has also been owned by G&A Private Equity since 2008, so there is ample possibility that the PEF is engaged in negotiations with Woori Financial Group. In 2017, G&A identified OK Financial Group as a preferred bidder for eBest, but both sides failed to finalize the deal in the end.
Given the possible synergy with Woori's existing financial businesses, industry sources said the financial holding firm will likely prefer Yuanta Securities for acquisition among the potential candidates.
"Yuanta's sales price will be relatively higher than expected, but the company will be the most attractive securities firm for acquisition from the perspective of Woori, as Yuanta's well-structured retail business can generate huge synergy with Woori Financial's current finance portfolio," a source from the industry said.
Last December, Yuanta was mired in a rumor over its possible sale to Woori. At that time, Yuanta's sale price was rumored to be as high as 1.2 trillion won ($910 million), even if its market capitalization was around a mere 500 billion won.
Another official, however, raised the possibility of Woori picking either eBest or SK Securities.
"PEFs' top priority is arbitrage trading, and they are skilled in sales of acquired companies," the official said. "If Yuanta is put up for sale, Woori will have to purchase the company at an overvalued price. But negotiations with PEFs will be smoother."
Last month, the new Woori chairman reiterated its willingness to engage "proactively" in discussions for the possible acquisition of a securities firm. When Yim was chairman of NH Financial Group in 2014, he drove the group's acquisition of the former Woori Investment & Securities ― now NH Investment & Securities.
Among the nation's top five financial holding firms, Woori is the only one without a securities affiliate. As the brokerage business is one of the core non-banking businesses for financial groups, Woori has been paying keen attention in recent years to taking over a brokerage house.
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