Auction will be carried out with SKT as sole bidder


Creditors of Hynix Semiconductor Inc. have decided to continue with selling the company on schedule, Korea Exchange Bank said Tuesday.

After STX Group pulled out of the bid on Monday, market watchers had raised concerns that the process would be delayed or even fall apart for the third time. STX Group, which had entered the bid against SK Telecom, pulled out of the proceedings citing unstable an economic outlook and the heavy investments Hynix would require.

“Creditors-turned-shareholders of Hynix have decided to move forward with the sale in the face of market concerns that the process would not go smoothly,” KEB said in a statement.

Hynix has been under the control of its creditors since October 2001, and this is the third time they have pushed to sell their stakes.

The company’s creditors had tried to make a sale to a U.S.-based company in 2002 but plans were scrapped. Hynix was once again put up for sale 2009, but the plans fell apart over concerns that the sole bidder Hyosung Group was provided with preferential treatment.

With the creditors opting to push ahead on schedule, they will send out notice of the binding bid on Wednesday and receive the final bid at the end of October. The chipmaker’s creditors plan to seal the deal in the following month.

With only SK Telecom in the running, the bid will be carried out as a sole-source process. As such, industry sources say that no surprises are likely as long as SK Telecom puts in a bid that reflects market sentiment.

“If SK puts in a price that is acceptable to the market, (SK Telecom) is likely to take Hynix. If a too-low a price is put in, then the creditors can’t help but feel burdened as there is the possibility of being accused of preferential treatment (for SK Telecom) and negligence,” an unnamed KEB official was quoted as saying by local news agency.

The process of seeking a company to acquire part of the world’s second-largest chipmaker for the third time has not been smooth.

At the time of announcing the sale in June, the creditors had expected the final bids to be completed by last month but the process was delayed due to the differences between bidders and the creditors over the terms of the acquisition, and due to the preliminary due diligence period’s extension.

By Choi He-suk  (cheesuk@heraldcorp.com)