Heungkuk Life expressed strong regret and warned of legal action after Morgan Stanley and Goldman Sachs, the lead managers for the sale of IGIS Asset Management, named Hillhouse Investment Management Ltd., a China-based private equity fund, as their preferred bidder.
Heungkuk Life stated accordingly in a statement on Jan. 9 regarding the selection of the preferred bidder for the sale of IGIS Asset Management. Heungkuk Life said, "This sale process of IGIS Asset Management was neither fair nor transparent," and added, "From the outset, the shareholder representative and the lead managers publicly said they would not do a so-called 'progressive deal' ahead of the main bid, and trusting that, we showed our sincerity about acquiring IGIS Asset Management by offering the highest price in the main bid on Dec. 11."
It continued, "However, after the main bid, the lead managers delayed announcing the preferred bidder, then proposed a 'progressive deal' to Hillhouse, asking it to raise its desired acquisition price above the top price in the main bid, and 27 days after the main bid, they selected Hillhouse as the preferred bidder."
Heungkuk Life argued that the lead manager's initial promise not to do a 'progressive deal' was nothing more than a ploy to jack up the top price in the main bid. In particular, Heungkuk Life said it cannot help but suspect that, when the lead managers proposed a 'progressive deal' to Hillhouse, they may have leaked Heungkuk Life's bid amount.
Heungkuk Life said, "The selection of Hillhouse as the preferred bidder is a joint production colluded by a China-based private equity fund targeting Korea's real estate investment platform and foreign lead managers blinded by hefty performance fees, and it exceeds the bounds of discretion granted to the seller and is an incident that undermines trust and order in our capital market."
It also said, "We will not overlook the deception and illegality shown by the shareholder representative and the lead managers in this bidding process," and added, "We will make every effort, including legal action, to correct the wrongs in this bid."