Unitas Capital Gets Nine Bids for Buy The Way

HONG KONG (Reuters) – Asia-focused private equity firm Unitas Capital received nine bids for South Korean retailer Buy The Way, most in excess of $260 million, a source familiar with the situation said on Tuesday.

Unitas, formerly known as CCMP Capital Asia, acquired South Korea’s fourth-largest convenience store chain in July 2006 in a leveraged buyout deal for about $200 million.

The source told Reuters the bids were received late last week.

“The majority of the nine bids were in excess of 300 billion Korean won ($259.5 million),” said the source.

Bidders for Buy The Way include Korean and Japanese buyers as well as private equity funds, said the source.

Reuters reported last week Ministop Co (9946.T), Japan’s fifth-largest convenience store chain, and Lotte Group, South Korea’s retail industry leader, were expected to separately bid for Buy The Way. 

Representatives for Ministop and Lotte could not be immediately reached for comments.

Unitas, which hired Deutsche Bank (DBKGn.DE) earlier this year to advise on the sale, declined to comment.

Three to four bidders will be selected to enter the final-round, said the source, speaking on condition of anonymity as the bidding process is not public.

The deal was widely expected by industry sources to be closed before the end of this year. The winner of the bid would gain Buy The Way’s 1,400 stores.

ASIA CONSUMERS

Despite the financial crisis, consumer-driven sectors remain hot in Asia due partly to the region’s rapid economic recovery and big market potential in the retail industry.

On Tuesday, Reuters reported Affinity Equity Partners sold TheFaceShop, a South Korean maker of lower-price cosmetics to LG Household (051900.KS) for $364 million.

In June, U.S. buyout fund Bain Capital agreed to invest up to $418 million in Beijing-based GOME, dubbed “China’s Best Buy”, beating rival bidders including Kohlberg Kravis Roberts & Co.

Japanese convenience stores have been keen to expand in fast-growing Asian countries with their domestic market saturated and unlikely to grow due to the country’s dwindling birthrate and an ageing population.

South Korea’s convenience store market grew 17 percent to 6.5 trillion won last year and there are nearly 14,000 stores.

CCMP was the private equity group that spun out of Wall Street bank JPMorgan (JPM.N) in 2006.

In December, Unitas, headquartered in Hong Kong, raised $1.2 billion for its third buyout fund, Asia Opportunity Fund III L.P., pulling the money together at a time when lending was tight, volatility high and valuations falling.  

By George Chen
(Additional reporting by Donald Durfee; editing by Elaine Hardcastle)