[비즈한국] Homeplus, which is currently undergoing corporate rehabilitation procedures, is set to begin a full-scale sale immediately after the Chuseok holiday. While the company is accelerating efforts ahead of the November deadline, industry observers suggest that acquisition conditions are difficult. With even the possibility of liquidation being raised, employee anxiety is mounting.
Struggling to Find Buyers, Shifts to Public Sale After Chuseok
About seven months after entering corporate rehabilitation proceedings in March, Homeplus is embarking on a process to find a new owner through public bidding. According to the industry, Homeplus will accept letters of intent and confidentiality agreements until October 31, conduct preliminary due diligence from November 3 to 21, and accept final bids by November 26.
Since receiving the court’s decision to initiate rehabilitation, MBK Partners, the majority shareholder of Homeplus, has been pursuing a sale with the court’s pre-packaged M&A approval. However, failing to find a viable lead candidate, the process appears to have shifted from private negotiations to public competitive bidding.
Last month, MBK Partners made a surprise announcement that sale negotiations were in progress. On September 19, after meeting with MBK Partners Chairman Michael Kim at the Homeplus headquarters in Gangseo-gu, Seoul, Democratic Party lawmaker Kim Nam-keun told reporters, "(Chairman Kim) said they are currently in negotiations with a strong candidate, and they have agreed to conclude by November 10 this year."
Following this statement, the industry showed keen interest, wondering if the Homeplus sale was finally on track. While specific negotiation partners were not disclosed, speculation mounted that the potential buyers were likely overseas retail companies or global private equity firms.
However, as MBK Partners announced the public bidding for Homeplus, suspicions have been raised that Chairman Kim's remarks were merely a way to deflect pressure ahead of the parliamentary audit. The Homeplus labor union, in particular, strongly criticized the situation. The union argued, "They claimed there was a prospective buyer and that the process was underway, only for Samil PricewaterhouseCoopers to announce a public bid for Homeplus 15 days later. This shows that MBK’s Michael Kim did not hesitate to deceive the government and the ruling party, and it is a blatant attempt to avoid the parliamentary audit."
Mounting Anxiety Over Sale Difficulties; An 'Unwelcome Chuseok' for Homeplus Workers
Industry experts believe that even with the transition to public bidding, it will be difficult to find a buyer. The primary reason is the massive debt burden any acquirer would have to shoulder. Homeplus's total debt is reportedly around 5.5 trillion won, consisting of 3.4 trillion won in lease liabilities for store rentals and 2 trillion won in financial debt.
Another obstacle is that the company’s "going concern value" is lower than its "liquidation value." According to a report submitted to the court by Samil PwC, the liquidation value of Homeplus was estimated at 3.6816 trillion won, while its going concern value was assessed at 2.5059 trillion won. This implies that the company is worth more dead than alive. Since the "principle of preserving liquidation value" in rehabilitation requires the acquisition price to be at least as high as the liquidation value, any buyer would face the burden of paying over 3.68 trillion won for a company valued at 2.5 trillion won.
Currently, Homeplus must submit a rehabilitation plan to the court by November 10. If no bidder emerges in the competitive bidding process after Chuseok, there is a possibility that the court may consider a split sale or liquidation.
If it leads to liquidation, the fallout is expected to be significant. With over 20,000 people directly employed across approximately 100 stores nationwide, the potential for employment instability is high. It would also directly impact partner companies and suppliers.
Homeplus employees find this year’s Chuseok, spent in a climate of uncertainty, to be bitter. The labor union expressed, "Since the corporate rehabilitation began in March, countless employees, including 500 direct Homeplus staff and contract workers, have been forced to resign. Hundreds of thousands of workers and small business owners do not feel welcome to celebrate this national holiday given the current, unpredictable situation."
Meanwhile, Homeplus workers delivered an open letter to President Lee Jae-myung on October 6, the day of Chuseok. The letter, written on behalf of all union members of the Homeplus branch of the Korea Mart Industry Union, urged a thorough investigation into the management practices of MBK Partners and the establishment of fundamental government-level countermeasures.
They stated, "This year’s Chuseok is filled with fear and anxiety rather than gratitude and joy. The reality is that we cannot even tell our families that ‘everything will be fine’ while setting the holiday memorial table. The government fostered private equity firms, the National Pension Service invested in them, and financial authorities were negligent in their supervision. The government must directly step in to investigate MBK’s illegal management and prepare concrete measures to normalize Homeplus."