This article was displayed on the ChosunBiz MoneyMove site on March 25, 2025, at 5:17 p.m.
Oasis, which operates the early morning delivery service company Oasis Market for fresh produce, has increased the likelihood of acquiring TMON under favorable conditions without competitors. Ahead of its initial public offering (IPO), Oasis is growing its size through mergers and acquisitions (M&A) to align its corporate value with major shareholders' expectations. However, there are concerns in the industry that the acquisition of TMON could actually turn into a 'misstep.'
According to investment banking (IB) industry sources on the 25th, Oasis is looking to acquire TMON in April. The deadline for submitting the letter of intent (LOI) for the TMON acquisition was by the 21st, and the official acquisition proposal is due by April 9. However, the possibility of additional bidders emerging is low, and conversely, Oasis has a strong willingness to complete the deal, increasing its chances of acquiring TMON.
Currently, TMON is proceeding with the sale using the stalking horse method, which involves selecting a preferred bidder first while also holding a public bidding process. Oasis was selected as the preferred bidder after entering into a conditional investment agreement with EY Han Young, the sales agent for TMON, on the 6th.
Oasis is reported to have presented an amount slightly exceeding the liquidation value (13.6 billion won) for the acquisition of TMON. Ryu Guang-jin, the CEO of TMON, appeared at a court hearing on the 18th and stated, 'The anticipated acquisition amount is roughly 30 billion won,' but it is expected to be lower than that.
Oasis has a healthy cash reserve for an e-commerce company, so it is expected that it will not need to incur leverage. Oasis's cash and cash equivalents are projected to reach 149 billion won by the end of 2024, a 25.4% increase compared to the end of 2023. It has steadily increased its cash from 98.8 billion won in 2021.
Oasis is adopting a strategy to enhance its corporate value through M&A. This is due to its major shareholders. UCK Partners, a private equity firm and the largest shareholder, appraised Oasis's value at 800 billion won during a pre-IPO investment, stating that a minimum corporate value of 900 billion won must be recognized for the IPO to proceed.
However, adhering to this condition has proven difficult. In 2023, Oasis expected to reach a corporate value of up to 1.25 trillion won as it initiated the listing process, but the valuation recognized by investors during the institutional demand forecasting was only 630 billion won. Consequently, UCK Partners exercised its veto rights, forcing them to abandon the IPO.
In other words, to increase the chances of a successful IPO in the future, Oasis needs to actively pursue M&A to expand and enhance its corporate value. Oasis has previously pursued new businesses by acquiring quick commerce V from Mesh Korea and establishing a live commerce firm, Oasis Alpha, in partnership with KT Alpha, but it has not achieved notable results. In January, it conditionally acquired Wise U X Global, which operates the chicken breast brand 'I'm Chicken', for about 5 billion won.
An industry official noted, 'Oasis seems to be acquiring well-known entities one after another to overcome its low recognition,' adding that 'since TMON's value, which once reached 2 trillion won, has significantly fallen, the intention to buy at a relatively low price to compensate for deficiencies is positive, but it is uncertain if it will benefit corporate value.' This official also added, 'It is uncertain whether sellers will return properly as the period of inactivity for TMON extends.'
The reason Oasis is interested in TMON primarily lies in TMON's membership base. Considering that TMON has approximately 4 to 5 million active members, more than double that of Oasis, there is an advantage of potentially ranking among the top five in terms of membership at a low cost. However, TMON recorded an operating loss of 248.8 billion won in 2023, and has never turned a profit. There are concerns that this could negatively impact the operational stability of Oasis, which is one of the few e-commerce companies managing to be profitable.
Several uncertainties remain regarding the successful acquisition. One issue is the settlement amount that must be paid to sellers following last year's large-scale non-settlement incident. Sources indicate that the price set by Oasis may not reach even 1% of the unsettled amounts. Therefore, how well they can persuade creditors is expected to act as another variable in the TMON acquisition process. EY Han Young is expected to start the process of persuading tens of thousands of creditors from April.