SKT, STX bid for Hynix

SK Telecom and STX Group have submitted letters of intent to acquire Hynix Semiconductor.

Friday marked the deadline for a sale broker’s receiving LOIs for a 15 percent stake, whose value ranges between 2.34 trillion won ($2.18 billion) between 2.74 trillion won, in the world’s 2nd-largest semiconductor firm.

According to industry sources, SK Telecom has the strong willingness that it “would not lose the bidding game as long as it has participated in the bidding.”

SK Telecom, which controls about half of the nation’s mobile market, said in a press release that it presented an LOI to buy the chipmaker “to secure a future growth engine and seek overseas business opportunities.”

STX Group vice chairman Lee Jong-chul had already hinted that the company would go to some lengths to remain in the race once a decision is made.

“There are parts we know about, and those we have doubts about, but if those are resolved through the due diligence, (the company) will go all the way,” he said. 

He said the group, whose operations are centered on shipbuilding, has been in talks with a Middle Eastern state-run fund regarding the Hynix deal for a month.

He added that the Middle Eastern party first came to STX Group with the suggestion that it would act as a financial investor in a potential bid for Hynix.

“If we acquire the company after the due diligence, (the group) will use existing cash assets and (raise funds) by selling some assets.”

But KCC Group said earlier in the day that it would not participate in the bidding competition.

Analysts had predicted that KCC could be included as one of the potential buyers.

The sale project has been considered a hot issue in the global semiconductor industry.

Hynix was previously a member of the Hyundai family, starting out as “Hyundai Electronics” in 1983. It later on acquired LG’s semiconductor unit in 1999 and took on the Hynix moniker in 2001.

Thanks to the remarkable recovery it achieved by overcoming crises in 2001 and 2007, Hynix has been cited as a company worth acquiring, especially for the Hyundai family, such as KCC.

Hynix is currently able to handle the ultrafine 40-nanometer-level processing technology. In chips, thinner is better as a chip with thinner tech can cram more capacity and thus cut manufacturing costs.

By Kim Yon-se (kys@heraldcorp.com)