Videocon makes revised bid for Daewoo Electronics

The Videocon Industries-led consortium has submitted a revised bid to the creditors of South Korean electronics major Daewoo Electronics for buying their stake in the company. The other strong contender for Daewoo’s assets is South Korean equity fund MBK Partners. Last month, the Videocon-led consortium had lost its preferred bidder status after the creditors of the ailing company rejected its proposal to acquire Daewoo for a lower price following due diligence as the Videocon consortium had asked for a 13% discount on the initial bidding price of $730 mn to acquire a 97.5% stake in the company.

Read the Business Standard article.

Videocon to now bid on a non-exclusive basis for Daewoo Electronics

It looks like that Videocon will not give up on Daewoo Electronics so easily. The Economic Times reports that Videocon Industries has got UBS and Citigroup, its investment bankers, to put forth a completely separate bid for troubled consumer durables maker Daewoo Electronics after recently losing its ‘preferred bidder’ status. The company will now compete on a non-exclusive basis with MBK Partners, a South Korea-based private equity fund which was selected as the secondary bidder for the deal.

The promoters of Videocon, the Dhoots, are visiting Korea early next week to renew discussions with the Korean durable company. Videocon had earlier insisted on a 15% reduction in the original purchase bid of $730 mn. Videocon is now hoping to win the bid on the premise that the second sole bidder is an equity fund without the capabilities and expertise to manage Daewoo’s durable business. However, Videocon may stand to lose the bid in case a new bidder enters the fray, offering a more attractive valuation.

Read more on this in The Economic Times.
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