This article was published on ChosunBiz MoneyMove (MM) at 9:42 a.m. on Oct. 15, 2025.
Private equity firm MBK Partners and Mirae Asset Securities have begun forced sale work on the management rights of CGI Holdings, the Asia regional holding company of CJ CGV. It was confirmed that they recently selected global investment bank Morgan Stanley as the sale adviser and have begun searching for potential buyers.
According to the investment banking industry on the 15th, MBK Partners recently finalized Morgan Stanley as the sale adviser for CGI Holdings together with Mirae Asset Securities' private investment team (hereafter Mirae Asset Securities PE). It has been about six years since MBK Partners became the second-largest shareholder in CGI Holdings by investing with the Mirae Asset Securities PE consortium.
The sale target is 100% of CGI Holdings' shares. It includes CJ CGV's 82.42% stake as the major shareholder of CGI Holdings. This is because CJ CGV gave up the call option to repurchase the financial investors' equity despite notification of the consortium's drag-along exercise by MBK Partners and Mirae Asset Securities PE.
In December 2019, the MBK Partners and Mirae Asset Securities consortium participated in a paid-in capital increase by CJ CGV and secured a 28.57% stake in CGI Holdings. They invested 333.6 billion won and set a condition that CGI Holdings must list on the Hong Kong Stock Exchange by June 2023 with a corporate value of more than 2 trillion won.
In addition, if the listing failed, CJ CGV would guarantee a certain internal rate of return (IRR) and repurchase the equity (call option), or the financial investors could combine their holdings with the largest shareholder's stake and sell to a third party via the so-called drag-along rights. It was designed to ensure financial investors could recover their investments stably.
CGI Holdings' listing ultimately failed. To list on the Hong Kong Stock Exchange, it must post two consecutive years of profits, but CGI Holdings posted a net loss of 24.4 billion won last year. This was an increase from a 19.3 billion won net loss in 2023, and together with the 10 billion won net loss in 2022, it recorded losses for three consecutive years.
CJ CGV judged that it would not be able to list CGI Holdings, repurchased 8.7% of the shares held by financial investors for 126.3 billion won in July last year and extended the drag-along exercise period to this year (until July 19), but it gave up acquiring the remaining 17.58% stake of the MBK Partners and Mirae Asset Securities PE consortium.
MBK Partners and Mirae Asset Securities PE reportedly chose Morgan Stanley as the sale adviser considering its global investment banking network and ability to connect with overseas investors. Morgan Stanley also led the sale of minority stakes that MBK Partners and Mirae Asset Securities PE pursued before exercising the drag-along.
Morgan Stanley is said to have begun searching for buyers centered on strategic investors, such as major Southeast Asian retailers. Because CGI Holdings is the holding company that integrates and manages CJ CGV's cinema operations in Asia, including China, Vietnam and Indonesia, it is judged that local retail companies would have great interest.
The global slump in the theater market is seen as a major obstacle to selling CGI Holdings' management rights. With the growth of over-the-top streaming services and economic downturns, audiences visiting theaters have declined. Last year, global box office ticket sales fell by about 8% to 9% from the previous year, leading some to say the recovery trend has been halted.
The sale price is reported to need to exceed $400 million (about 550 billion won). Before the MBK Partners and Mirae Asset Securities PE consortium notified the drag-along, CJ CGV valued the entire equity at $400 million and exercised its right of first offer (ROFO). Under the contract, financial investors can only sell at prices above the ROFO price.
The MBK Partners and Mirae Asset Securities PE consortium reportedly could not accept the ROFO despite the burden on the sale price. If the consortium were to accept CJ CGV's ROFO, the value of the remaining 17.58% stake in CGI Holdings held by the consortium would be about 97 billion won, far short of the unrecovered invested principal of 207.3 billion won.
An investment banking industry official said, "Although they selected global investment bank Morgan Stanley as the sale adviser, the difficulty of the sale itself is expected to be quite high," and added, "It is at least positive that, with about a year remaining until the maturity of the acquisition financing, they can secure relatively sufficient time to search for buyers and negotiate terms."