Homeplus Co., a South Korean hypermarket operator under court-led rehabilitation, has drawn letters of intent (LOIs) from two bidders, including AI firm Harex InfoTech Inc., according to investment banking sources on Friday.
The retailer is wholly owned by private equity firm MBK Partners, which put the company up for sale. After its stalking-horse process faltered, it shifted the transaction to a public competitive bidding format this month.
The emergence of bidders defies market expectations that the open process would fail to attract credible investors. NH NongHyup Agribusiness Group Inc., long viewed as a strong candidate given Homeplus’s role in local retail employment and agri-food distribution, did not participate, the sources said.
Samil PwC, which is managing the sale process, confirmed two bidders had submitted LOIs and non-disclosure agreements as of 3 p.m. (Korean local time) on Oct. 31.
Homeplus received court approval to find a new buyer after entering a rehabilitation program in March.
It had initially adopted a stalking-horse sale process, which allows a troubled company to secure a preliminary deal with a selected bidder before inviting other bidders. But it failed to attract a buyer through a stalking-horse process.
Beyond bidder interest, financing and liability relief remain pivotal for deal execution.
According to IB sources, any buyer would likely seek state-run lender support to refinance about 1.3 trillion won in loans owed to Meritz Financial Group Inc.
They add that easing terms on 582.6 billion won of redeemable convertible preferred shares (RCPS) held by the National Pension Service (NPS) would also help reduce the acquirer’s burden.
Operational stress underscores the urgency: the retailer has faced tight liquidity, struggling to cover basic expenses such as electricity bills.
A recent study indicates the retailer’s liquidation value exceeds its valuation as a going concern.
The case has attracted political and labor attention. Policymakers have pressed for a solution that averts large-scale job losses and protects the supplier network, even as the government weighs potential backlash over any support perceived as facilitating MBK’s long-delayed exit.
MBK Partners last month pledged 200 billion won in fresh funding for Homeplus, on top of a previously pledged 300 billion won, including a personal contribution from founder-chairman Michael ByungJu Kim, to stabilize operations.
With bidders now in the frame, prospects for the rehabilitation have improved. The deadline to submit the rehabilitation plan is Nov. 10.
However, with preliminary due diligence slated for Nov. 3–21 and a main bidding round on Nov. 26, market participants expect the court to extend the filing deadline accordingly.
“Submitting an LOI isn’t the only path to participation,” an investment banking source said. “Some investors may enter directly at the main bidding stage, so the real competition will unfold there.”
