이 기사는 2020년 06월 24일 08:00 thebell 에 표출된 기사입니다.

Interest in a sale of Doosan Co Ltd’s hydraulic components business unit Doosan Corporation Mottrol appears to be waning among prospective buyers.

The shortlisted bidders, announced earlier this month, are carrying out due diligence on Doosan Corporation Mottrol in a virtual data room (VDR), which will be followed by a management presentation this week, sources said on June 22. The final round of bidding is expected to take place around the middle of July after their access to a VDR is expired early next month.

It was initially reported that four bidders were selected to participate in the final bidding process, but two more bidders have been added later, according to sources.

This has led to potential buyers’ interest in the sale abating as rumors swirl that the seller selected more bidders to make them compete harder, reducing the likelihood of success of the planned sale that is regarded crucial to alleviate Doosan Group’s cash issues.

The six shortlisted bidders are all financial investors after some strategic investors which were considering buying a stake in Doosan Corporation Mottrol ultimately decided to pull out.

The fact that the bidding process is on a tight timeline to go through issues found during due diligence may also deter the shortlisted bidders from submitting their final offers, industry watchers said. Since Doosan Corporation Mottrol is not a separate entity but a business unit within Doosan Co Ltd, more time may be needed for the bidders to extract numbers from information disclosed by the seller for valuation of the target.

The seller has not made clear about Doosan Corporation Mottrol’s defense business either, which may have to be excluded from the sale if the unit is sold to a foreign buyer.

It may be one of concerns for the bidders that they have to make their final offers without on-site due diligence of Doosan Corporation Mottrol’s plant in China due to the travel restrictions imposed as a result of Covid-19. Last year Doosan Corporation Mottrol produced more than 40 percent of total hydraulic components in its Chinese plant.

“There has been a shift in the mood among the shortlisted bidders,” an industry insider said. “The majority of them are said to be conducting due diligence without advisers, which could be a sign they are not so eager to acquire the target. Several factors such as possible effects of Doosan Group’s other restructuring-related sales on Doosan Corporation Mottrol’s future revenue, limited due diligence and labor union issues could play a role in reducing the target’s attractiveness.”

(Reporting by Hee-yeon Han)