Friday, September 27th, 2013
The three companies that had submitted applications in the preliminary bidding last month, including MorganStanley Private Equity, Han & Co., and H&Q Asia-Pacific Korea, weren't present in today's main bidding. The reason for their non-participation has to do with their reservations about the possibility of recouping investment. According to plans, Innocean is scheduled to publicly list its shares by 2016. But the Hyundai Motor Group has not yet given any confirmation as to how investors could get their money back.
Innocean's 10-percent stake is estimated at 70 to 100 billion won. Although the ad agency's operating profit is rising steadily, the recently announced regulation to keep conglomerates from giving jobs to affiliates within their own group may restrain the company's growth. The 10-percent stake has been out for sale because Hyundai Motor chairman Chung Mong-Koo donated it to the Chung Mong-Koo Foundation. Under the current tax laws, any non-profit organization receiving a company's shares in excess of 10 percent must pay a gift tax of more than 60 percent.
