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| Woori Financial Group's building in central Seoul / Korea Times file |
Woori did not take part in the preliminary bid that closed last week ― KB Financial Group and three PEFs, MBK Partners, Hahn & Company and IMM Private Equity submitted letters of intent.
But there is speculation that Woori may team up with one of them for the main bid, considering this was the case when it acquired Lotte Card in a consortium with MBK Partners last October.
Woori has stated that M&As for non-banking units will be the main focus of the group this year, and Chairman Son Tae-seung told reporters earlier this month the group is interested in acquiring Prudential.
According to sources and media reports, officials of Woori and IMM recently met to discuss the issue. IMM declined to comment.
A Woori official acknowledged that Woori has not ruled out its participation in the bid.
"Participants in the bid will be unveiled when the main bid takes place, but Chairman Son has stated that the group is reviewing the matter considering Prudential is a solid company," he said.
Up until last year, Woori stated that it was not interested in acquiring an insurer for the time being.
The group said it would place a priority in buying a capital firm, followed by a savings bank, a brokerage and then an insurer.
However, Woori's plans appears to have changed after the emergence of Prudential's sale.
Prudential ranked 11th in terms of assets and fifth in net profit in the first half of last year. Its risk-based capital ratio, a measurement of financial soundness, stood at 505.1 percent in June last year, the highest among life insurers.
Woori is seen to have held back from taking part in the preliminary bid, for two main reasons.
The financial authorities have applied a stricter standard on measuring risky assets on Woori Financial, after its holding company launched in January last year, and Woori is barred from securing a large amount of capital through issuing loans, considering financial health standards.
The bank is seeking for the authorities to allow it to apply a more relaxed standard.
Woori also currently faces uncertainties over sanctions to be imposed on its chairman. The financial authorities are currently reviewing sanctions on Son, for his responsibility in the bank's mis-selling of derivative options that caused major losses for investors last year.
The three major home-grown PEFs have successfully raised trillions of won to prepare for M&A deals.
According to industry sources and media reports, IMM is expected to raise up to 2 trillion won for its fourth blind-pool fund that will close in February. IMM holds 5.62 percent of Woori's shares.
MBK is seeking to raise $6.5 billion by the first half of this year for its fifth buyout fund, MBK Partners Fund V; while Hahn & Co. finished raising 3.8 trillion won for its third blind-pool fund, while
