MBK and Affinity Eye Stake in Korean Water Purifying Company Woongjin Coway

(Reuters) – Private equity funds Affinity Equity Partners, MBK Partners and a listed retail unit of Lotte Group are among prospective bidders for an around $744 million stake in Korean water purifier company Woongjin Coway, sources with direct knowledge of the matter told Reuters.

Conglomerate Woongjin Holdings has put a 30.9% stake in Woongjin Coway on the block and hired Goldman Sachs to manage the sale. The stake is worth around $744 million based on Tuesday’s closing share price, but Woongjin Holdings is targeting as much as $1.7 billion, according to South Korean media reports also confirmed by one of the sources.

Goldman Sachs recently sent out a memorandum to potential bidders, including Korean and international strategic bidders and private equity funds, the source added.

Affinity, Goldman and MBK declined comment. Lotte Shopping last week told the Korean stock exchange its parent Lotte Group was looking to appoint advisers on its bid.

The sources declined to be identified as the information was private.

Woongjin Holdings is keen on expanding its foothold in the solar industry, and last year invested heavily in subsidiaries Woongjin Energy and Woongjin Polysilicon to build new facilities and expand polysilicon production capacity.

The firm said it was considering selling the stake in Coway in February.

The launch of the Coway stake sale had been planned for after first round bids for a majority stake in electronics retailer Hi-Mart Co. Ltd., in which Lotte Group and international private equity funds were considering participating.

But the Hi-Mart deal is on hold with the company’s chief executive Sun Jong-koo and others charged with neglecting their duties and embezzlement totaling 259 billion won ($228 million).

Coway products are rented to consumers, and the company makes further revenue through door-to-door sales generated by staff who maintain products in consumers’ homes.

The company has operations in Japan, Thailand, China, Malaysia and the United States.

By Stephen Aldred, Reuters

(Additional reporting by Mi-Young Kim in SEOUL; Reporting by Stephen Aldred; Editing by Denny Thomas and Jonathan Hopfner)

Image credit: Photo of water on hands courtesy of ShutterStock