Hillhouse Investment Management Ltd., a private equity fund (PEF) manager selected as the preferred bidder to acquire IGIS Asset Management, Korea's largest real estate asset manager, said on the 10th that it "places transparency and compliance as the top values throughout the entire transaction." A day earlier, Heungkuk Life Insurance, which was eliminated as a takeover candidate, publicly raised allegations of illegality and unfairness in the sale process and signaled legal action.
Hillhouse Inve said in a statement the same day, "We strictly complied with the standards and rules of the sale manager in all procedures," adding, "We plan to proceed with the transaction in a transparent and responsible manner through cooperation with regulators going forward." However, there was no direct rebuttal to specific issues raised by Heungkuk Life Insurance, such as the "progressive deal" or the leak of bid prices.
Hillhouse Investment Management Ltd. said, "We highly value IGIS Asset Management's outstanding track record and industry leadership," adding, "By combining IGIS's expertise and market insight with our global network and know-how, we will create greater business opportunities."
It continued, "This acquisition will be led by Samty AMC, an affiliate of Hillhouse. Samty AMC has grown in Japan as a platform for residential and hotel development and asset management and has built a real estate platform across Asia," adding, "Samty AMC will support in a manner that respects IGIS Asset Management's existing organization and expertise while providing a global network and resources."
Earlier, Heungkuk Life Insurance hinted at legal action, saying the previous day, "We will not overlook the deception and illegality of the shareholder representative and the sale manager." According to Heungkuk Life Insurance, the seller said before the main bid that it would not conduct a "progressive deal," but after the main bid, it delayed announcing the preferred bidder and proposed additional price competition only to Hillhouse, requesting an amount exceeding the highest price in the main bid.
A progressive deal is a method of raising the sale price by reintroducing price competition among multiple candidates who passed the main bid. Heungkuk Life Insurance criticized, saying, "We cannot rule out the possibility that the sale manager leaked our bid price (1.05 trillion won) to Hillhouse," and, "This decision is the result of collusion between a China-based PEF targeting Korea's real estate investment platform and an overseas manager blinded by a hefty performance fee."