이 기사는 2020년 04월 10일 08:00 thebell 에 표출된 기사입니다.

A sale of D’Live, South Korea’s fourth largest cable TV service provider, is drawing attention amid Hyundai Department Store’s announcement of its split-off of its cable TV and broadband services arm Hyundai HCN.

Creditors of D’Live are expected to hire a sale manager this week, according to investment banking industry sources on April 7. Market insiders expect either Morgan Stanley or Bank of America Merrill Lynch to be picked. The sale process has been underway since 2017 with Samil PwC hired as a sale manager. Industry watchers expect the sale process to accelerate with the creditor group replacing the sale manager. “The sell-side’s negotiations with potential buyers have made a progress, which is expected to speed up the auction process with the replacement of the sale manager” said an industry source, adding, “In addition to KT, SK Broadband and LG Uplus are all showing interests in taking over the company.”

Market environment surrounding the sale of D’Live has been changed. The cable industry consolidation has accelerated via major acquisitions by the Big three mobile carriers – KT (Skylife), LG (LG Uplus and HelloVision) and SK (SK Broadband and Tbroad).

Market watchers see KT has the highest likelihood of acquiring D’Live as KT already has finished its due diligence on D’Live. KT initially announced it would acquire D'Live, but was cautious over obtaining over a third of the market that would breach the government regulation. The law had expired in June 2018. A bill currently pending in parliament does not include the one-third market share rule but other measures to toughen regulations on market monopoly.

Against this backdrop, some say the sale of D’Live may gain traction with its peer Hyundai HCN put up for sale. According to the Ministry of Science and ICT, KT held a market share of 31.31 percent in the country’s pay TV market as of 2019, while LG Uplus held 24.72 percent and SK Broadband had 24.03 percent. D’Live and Hyundai HCN held a market share of 6.09 percent and 4.07 percent, respectively.

If KT is successful in acquiring D'Live, the company is expected widen its gap with the runner-up LG Uplus. If SK Broadband takes over D’Live, it is likely to narrow the gap with KT. Grabbing any one of the two companies could change their market ranks. In this regard, the competition to take over D’Live and Hyundai HCN may get fiercer with the telecom companies actively assessing the two target companies. It is said that the creditor group of D’Live is strongly willing to proceed with the deal at a rapid pace.

Local private equity firm MBK Partners and Macquarie Korea Opportunities Management had bought D’Live in 2007 for 2.2 trillion won, of which 1.4 trillion won was funded through acquisition financing. Their previous sale attempts all failed to go through. This time, the sale process is led by creditors that arranged acquisition financing, including Shinhan Bank and Hana Bank.

(By reporter Kim Hye-ran)