Snack maker Orion, buyout firms make initial bids for Tesco S.Korea unit (updated)

ORION Holdings

25/06/2015 11:23

* Carlyle, CVC among interested parties - media 
    * Orion expected to team up with pvt equity for deal - 
analysts 
 
 (Adds details of private equity bids and analyst comment) 
    By Joyce Lee 
    SEOUL, June 25 (Reuters) - Snack maker Orion Corp 
 001800.KS  said it had submitted a preliminary bid for British 
retailer Tesco's  TSCO.L  South Korean unit Homeplus Co Ltd, 
joining several private equity firms in vying for what could be 
a $6 billion deal.    
    Buyout firms including Affinity Equity Partners, Carlyle 
Group  CG.O , CVC Capital Partners, Goldman Sachs'  GS.N  
private equity arm, MBK Partners and TPG  TPG.UL  also made 
first-round bids, the Korea Economic Daily reported, citing an 
unnamed investment banking source.  ID:nL3N0ZA5UL  
    Bloomberg reported that Carlyle, Affinity, CVC and MBK had 
bid, as had KKR & Co  KKR.N , citing people familiar with the 
matter. 
    A sale of Tesco's largest business outside Britain will help 
the retailer cut its debt and fund a turnaround plan at home. 
 ID:nL5N0XJ0U1  
    Affinity, Carlyle, CVC, Goldman Sachs, MBK, TPG and KKR 
declined to comment.  
    Tesco has hired HSBC  HSBA.L  to explore a sale of Homeplus, 
people familiar with the matter previously told Reuters. An HSBC 
official could not immediately be reached for comment on 
Thursday.  ID:nL3N0YQ344   
    Due to the hefty price tag on what could be Asia-Pacific's 
largest ever private equity deal and the No. 2 merger in the 
Asian consumer sector, the interested parties are expected to 
team up as the sales process progresses. 
    South Korea-based Orion, maker of "Choco Pie" and other 
snacks, said in a regulatory filing on Thursday that it had 
submitted a preliminary bid to the "potential seller." 
    Orion, with assets of 1.06 trillion won ($954.37 million) as 
of the end of March, is expected to join with private equity 
backers if it pursues a deal, analysts said.  
    "It doesn't have that much cash because it has invested a 
lot in China, where Orion's sales and profits far exceed those 
at home," said Cha Jae-heon, analyst at Dongbu Securities.  
($1 = 1,110.6800 won) 
 
 (Additional reporting by Elzio Barreto and Denny Thomas; 
Editing by Tony Munroe and Muralikumar Anantharaman) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: TESCO SOUTHKOREA/ORION CORP