Carlyle among bidders for $1.8 billion Kyobo Life stake: sources

SEOUL/HONG KONG - Fri Apr 20, 2012 8:12am EDT

A decoration is seen on the headquarters of Kyobo Life Insurance in central Seoul March 3, 2008. REUTERS/Lee Jae-Won

A decoration is seen on the headquarters of Kyobo Life Insurance in central Seoul March 3, 2008.

Credit: Reuters/Lee Jae-Won

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SEOUL/HONG KONG - (Reuters) - Carlyle Group CYL.UL is among private equity funds bidding for a stake in unlisted South Korean group Kyobo Life Insurance worth around $1.8 billion, sources with direct knowledge of the matter told Reuters.

Daewoo International (047050.KS) and Korea Asset Management Corp (KAMCO) are offering about a one third stake in the life insurance company in two separate sales, the sources said on Friday.

The sale offers a rare opportunity for private equity firms to invest in the life insurance sector, which is usually dominated by strategic investors who can pay higher valuations and command greater capital resources.

The stakes in Kyobo Life have come up for sale as Dutch group ING's (ING.AS) Asian insurance businesses are on the block, a deal expected to fetch more than $6.5 billion.

Separately, private equity firm Vogo Fund is exiting its near 61 percent stake in Tong Yang Life Insurance (082640.KS).

South Korean is among the more mature insurance markets in Asia, with premiums forecast to grow 3.8 percent this year and 3.9 percent in 2013, according to Swiss Re estimates. That compares with an Asian average of 4.4 percent for 2012 and 4.5 percent next year - steady growth that has been attracting private equity funds to the auction.

Asian buyout firms Affinity Equity Partners and MBK Partners are among the other buyout firms that have submitted initial bids for Daewoo's 24 percent stake, one of the sources said.

KAMCO, concurrently selling its 9.93 percent in Kyobo, has attracted the same suitors, another source said.

Based on OTC pricing for Kyobo Life shares of 250,000-300,000 won, the total value for both stakes is as much as 2.1 trillion Korean won ($1.8 billion).

Daewoo, part of the POSCO Group, has put its stake on sale as part of a move to sell non-core assets, while KAMCO is trying to retrieve public funds it has invested. The company acquired stakes in Kyobo Life from now defunct Daewoo companies.

ING's sale has attracted interest from South Korean insurers including Korea Life and Samsung Life Insurance (032830.KS), sources previously told Reuters.

Daewoo has hired Woori Investment & Securities (005940.KS) and Australian group Macquarie (MQG.AX) to advise on the sale of its stake, while KAMCO has hired Samsung Securities (016360.KS) and Barclays (BARC.L), the sources said. The two sales are running on similar timetables.

The initial deadline for expressions of interest closed last Friday for Daewoo. Bidders will likely have three weeks to conduct due diligence.

KAMCO has received six bids and plans to pick qualified bidders next week, according to one of the sources, adding all six bidders were expected to qualify. Bidders will have a month to conduct due diligence before submitting actual bids.

The sources were not authorized to talk to the media.

Carlyle, Daewoo, Woori and Samsung declined to comment. Affinity and MBK were not available to comment.

(Editing by Dan Lalor and Denny Thomas)

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