South Korea’s grocery delivery platform Oasis Corp., which has been pursuing a foray into a bigger e-commerce market at home and abroad, is seeking to buy TMON Inc., which has been placed under court protection due to a liquidity crunch debacle last summer.
TMON, Korea’s first-generation e-commerce player famous for a low-price marketing strategy, filed a motion with the Seoul Bankruptcy Court on Tuesday to request the designation of Oasis as its initial bidder in a stalking horse bid.
TMON and its sister e-commerce platform WeMakePrice Co. have been in negotiations with multiple potential buyers of their businesses since their business faltered last July due to delayed payments to vendors using the platforms caused by the liquidity turmoil of their parent Qoo10 Pte. in Singapore.
They have been under court management since the delayed payment fiasco last summer and are ordered to submit a rehabilitation plan to the bankruptcy court by the end of this week.
Their original plan was to find a new owner before the court’s approval of its turnaround plan.
After it failed to find the right suitor, Oasis has approached them with an offer to buy TMON only in a stalking horse bid, meaning other contenders would join the race.
STALKING HORSE BID
In a stalking horse bid, a bankrupt company chooses the best contender from a pool of bidders who will make the first bid on the firm and then invite other competitors to bid with the preset low-end bidding bar designed to prevent other bidders from underbidding the purchase price.
EY Hanyoung Korea, the lead manager of the TMON sale, will sign a stalking horse bid deal with Oasis on Thursday once the bankruptcy court approves Oasis as the first bidder.
It plans to invite other bidders to the auction next week to determine the final bidder in April.
Oasis’ bidding price is not disclosed, but participating contenders will be notified about the offered price in nondisclosure agreements.
If one of the bidders offers a higher price than Oasis, the bidder will be chosen as the final bidder. Still, Oasis is given priority to challenge the final competitor to take control of TMON by matching the new offer conditions.
If no bidder offers a higher price, then Oasis will automatically become the final bidder.
AMBITION TO BECOME A BIGGER E-COMMERCE PLAYER
Founded in 2011, Oasis, a grocery delivery platform operator, started as an offline organic food-selling chain store with a nationwide network of fresh food producers across Korea.
In 2018, it advanced into the dawn delivery platform market by launching Oasis Market.
It attempted to go public in 2023 but withdrew its initial public offering plan due to tepid institutional demand.
Last summer, it was poised to buy Korea’s major e-commerce operator 11Street Co. to ramp up its business.
With 11Street under its wings, Oasis could have been a game-changer for the Korean e-commerce industry as the grocery delivery platform could expand to international shopping and delivery services with a broader range of products.
The deal could have enabled Oasis to broaden its customer base and directly deliver Korean groceries to overseas markets through the existing partnership between global retail giant Amazon.com Inc. and 11Street.
But the deal collapsed due to opposition from the National Pension Service, Korea’s biggest institutional investor who is one of financial investors of 11Street.
TMON
Founded in 2010, TMON had drawn attention in its early business years with a low-price marketing strategy.
Like many other first-generation e-commerce players, however, it was unable to compete against newcomers, which lured shoppers with a diverse selection of goods.
It was acquired by Qoo10 in September 2022 and then welcomed WeMakePrice as its sibling company under Qoo10 early 2023.
EY Hanyoung is seeking to sell WeMakePrice in a separate deal.
Their parent, Qoo10, is grappling with a liquidity shortage after a series of aggressive mergers and acquisition deals.
By Ji-Hyo Lee
jhlee@hankyung.com
Sookyung Seo edited this article.
