Daou-CJ consortium selected as preferred bidder for JoongAng Ilbo acquisition

A consortium of Daou Kiwoom and CJ was selected Monday as the preferred bidder to acquire the JoongAng Ilbo, moving the newspaper closer to ending its creditor-led restructuring. The JoongAng Ilbo publishes the Korea JoongAng Daily.

Samil PwC, which is managing the sale, said the Daou-CJ consortium received the highest score among the final bidders in an open competitive tender. Bids were assessed comprehensively and fairly on price, financing capacity, the effect on the company's financial structure, the public-interest value of its journalism, job security and future investment.

The deal is structured as a third-party share allotment, under which the consortium will subscribe to newly issued shares and become the largest shareholder. The money will go directly to the JoongAng Ilbo and be used to repay debt and to restore the company's financial health. Samil PwC said the amount was large enough to significantly improve the company's financial structure.

The consortium will next sign a conditional share subscription agreement. A meeting of the financial creditors' council and a bondholders' meeting will follow, then a JoongAng Ilbo board meeting and payment for the new shares. The schedule may change depending on talks with creditors, but the aim is for the JoongAng Ilbo to complete its workout within the year.

The JoongAng Ilbo said it would treat the sale as a chance to turn the situation around and would focus on strengthening its content. The newspaper had the highest revenue of any Korean newspaper last year, has posted an operating profit for 13 consecutive years and expects to remain profitable this year. Once the new ownership is in place, it plans to push further on content innovation and management efficiency.

BY JIM BULLEY   [[email protected]]