S.Korea's Daewoo Int'l draws 3 non-binding bids.
South Korean steelmaker POSCO and retail-focused Lotte Group have submitted non-binding bids for an up to $2.2 billion stake in Daewoo International, Daewoo's top shareholder said on Monday. Trading and resource development company Daewoo is being sought by local conglomerates because it focuses on development of buoyant oil, gas and resources, while its trading network offers international channels amid an ongoing global economic recovery.
POSCO, the world's fourth-largest steelmaker, is considered the frontrunner for the 68 percent Daewoo stake, worth 2.45 trillion won ($2.17 billion) at the current market value.
Daewoo, a former unit of the failed Daewoo Group, ships POSCO's steel products and also trades iron ore and base metals.
POSCO is also looking to expand through the supply chain through Daewoo's energy and resource development businesses, which could help it keep pace with acquisitive Chinese steel mills.
Lotte, whose flagship units include the country's No.2 retailer Lotte Shopping, joined the race in late February by submitting a letter of intent few had expected. Some analysts see the move as aimed at Daewoo's 24 percent stake in the country's No.3 life insurer Kyobo Life.
Lotte has an insurance unit, Lotte Non-Life, and operates petrochemical businesses that could benefit from Daewoo's energy assets.
The two are competing with a small domestic consortium led by a former Daewoo executive, which entered a bid on Monday.
Nine local financial institutions, including state-run debt clearer Korea Asset Management Corp (KAMCO), are offering to sell between 50 percent plus 1 share and their entire 68 percent in Daewoo International.
KAMCO said shareholders aimed to receive final bids in April and to sign the sale contract in June.