There is a transaction worth 7 trillion won for an apartment. This apartment has a jeonse of 2.9 trillion won, and the previous owner has stated that they will give up their equity. The new buyer can borrow 2 trillion won using the real estate as collateral to pay off part of the jeonse, and if they cover only the remaining part in cash, they can own the apartment for less than 1 trillion won in actual cash. This is the current structure of the Homeplus acquisition.
Homeplus, which is pushing for a merger and acquisition (M&A) before approval, claimed on the 8th that the actual cash needed for its acquisition could be less than 1 trillion won.
Homeplus stated that its total assets are approximately 6.85 trillion won, liabilities are 2.9 trillion won, resulting in a net worth of 4 trillion won, based on a report submitted by Samil, an investigator designated by the Seoul Bankruptcy Court, and added that if considering Homeplus's brand, business sustainability, and real estate holdings, the total corporate value is estimated at around 7 trillion won.
Homeplus also noted that the existing major shareholder, MBK Partners, decided not to assert any rights regarding its common stock investment worth 2.5 trillion won. This means that the new acquirer can secure controlling rights immediately without the burden of acquiring existing equity through new capital injection.
It added that 'the acquirer can purchase Homeplus at a liquidation value of around 3.7 trillion won as stated in the investigation report,' and argued that 'in practice, the corporate value must be set at least above the liquidation value in the context of restructuring M&A. Therefore, the acquirer effectively receives a discount of about 3.3 trillion won, which is roughly half of the corporate value.'
Homeplus also mentioned that 'if the acquirer values Homeplus at 3.7 trillion won for the acquisition, it is more than the total bond amount of about 2.9 trillion won, so securing creditor consent would not be a significant issue.'
Homeplus further indicated that 'if it utilizes the real estate assets valued at 4.8 trillion won as collateral, it can borrow around 2 trillion won by applying the typical loan-to-value (LTV) ratio, thus reducing the actual amount invested to below 1 trillion won,' and stated that 'the preferred stock will leave a balance after deducting creditors' claims within the range of 3.7 trillion won.'