POSCO seeks partners for Daewoo bid - source
SEOUL, Aug 18 (Reuters) - POSCO (005490.KS), the world's No.4 steelmaker, is seeking to partner up with a financial firm and South Korea's National Pension Service to bid for Daewoo Shipbuilding (042660.KS), a source close to the situation said on Monday.
"The move is a strategic option to drive competition out as grouping with banks and the pension fund will squeeze other potential bidders who may be financially stretched," the source told Reuters.
A 50.4 percent stake in Daewoo Shipbuiding is up for sale by the Korean government and is valued at around $4 billion at current share prices.
The source said bidding prices of Daewoo Shipbuilding, the world's No.3 shipbuilder, may rise to around 8 trillion won ($7.8 billion) to 10 trillion won ($9.6 billion) to reflect a management premium and expected rally in share prices after an official bidding process starts later this week.
The consortium is not likely to include a shipbuilder, which some analysts have said would help enhance operational synergies, due to possible delays in the approval process.
State-run Korea Development Bank, Daewoo's top shareholder and the lead manager for the deal, said last week it would invite bidders this week.
POSCO declined to comment.
At least three bidders have expressed their interest in Daewoo including construction focused GS group and energy-focused Hanwha group.
Earlier on Monday, Doosan Group said it would not make a bid for Daewoo. (Reporting by Miyoung Kim; Editing by Keiron Henderson)
