UPDATE 1-POSCO seeks partners for Daewoo bid - source
August 18th, 2008 | by admin |(Adds details)
By Miyoung Kim
SEOUL, Aug 18 (Reuters) - POSCO (005490.KS: Quote, Profile, Research, Stock Buzz), the world’s No.4steelmaker, is seeking to partner up with a financial firm andSouth Korea’s National Pension Service to bid for DaewooShipbuilding (042660.KS: Quote, Profile, Research, Stock Buzz), a source close to the situation said onMonday.
“The move is a strategic option to drive competition out asgrouping with banks and the pension fund will squeeze otherpotential bidders who may be financially stretched,” the sourcetold Reuters.
POSCO declined to comment.
A 50.4 percent stake in Daewoo Shipbuiding is up for sale bythe Korean government and is valued at around $4 billion atcurrent share prices.
The source said bidding prices of Daewoo Shipbuilding, theworld’s No.3 shipbuilder, may rise to around 8 trillion won ($7.8billion) to 10 trillion won ($9.6 billion) to reflect amanagement premium and expected rally in share prices after anofficial bidding process starts later this week.
The consortium is not likely to include a shipbuilder, whichsome analysts have said would help enhance operational synergies,due to possible delays in the approval process.
State-run Korea Development Bank, Daewoo’s top shareholderand the lead manager for the deal, said last week it would invitebidders this week.
