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Hyundai Dept Store, CJ Corp shortlisted to buy home appliance firm, say sources: Reuters

South Korea’s Hyundai Department Store Co Ltd and CJ Corp are among suitors reaching a second round of bidding for home appliance firm Tongyang Magic, people familiar with the matter told Reuters on Tuesday.

Private equity consortium NH-Glenwood plans to sell Tongyang Magic in a deal that could be worth around 500 billion won ($456 million), nearly double the 279.9 billion won that it paid for the company just two years ago, local media reported.

Also on the shortlist are SK Networks Co Ltd, Unid Co Ltd, CVC Capital Partners Ltd and a consortium of AJ Networks Co Ltd and a private equity arm of Standard Chartered, online publication Invest Chosun reported on Tuesday citing investment banking sources.

An official at Hyundai Department Store confirmed the company was shortlisted. Spokesmen at CJ Corp, SK Networks, Unid and AJ Networks declined to comment. CVC Capital could not be reached for comment.

Tongyang Magic competes with Japan’s Rinnai Corp in selling gas stoves, and Coway Co Ltd in leasing water purifiers.

Potential investors have said the leasing business in particular is attractive because it generates a stable cash flow as the number of single households rises.

Tongyang Magic’s rental customer accounts rose 25 percent last year to 750,000, while Coway’s rose 2.8 percent to 5.77 million, according to the companies.

Last year, private equity fund MBK Partners held an initial round of bidding for its 31 percent of Coway that could have valued the stake at about $2 billion. On Tuesday, An MBK spokesman said the fund was considering various options for its holding.

Last week, 13 parties submitted non-binding bids for Tongyang Magic, including China’s Midea Group Co Ltd and U.S. private equity funds Bain Capital and Carlyle Group LP , the Korea Economic Daily reported citing unidentified investment banking sources.