SSG, PEFs make final round for Yogiyo acquisition

Yanolja, the country’s top travel and lodging service platform operator, has dropped its bid for Korea’s second largest food delivery player Yogiyo, leaving retail giant Shinsegae and four private equity funds (PEF) seeking to be named preferred bidder for its acquisition.

According to the investment banking industry, Shinsegae’s online retailing business SSG.com qualified as a strategic investor due to its funding power among other reasons.

“MBK Partners, which owns Homeplus, is a suboptimal contender that has qualified for the main bidding but will compete with the other major PEFs,” an industry source said. Affinity Equity Partners, Permira and Bain Capital are the other three.

In related news, Yanolja is said to have given up on an initial public offering before the end of the year.

SSG.com and MBK Partners are currently seen as the most likely buyers, which has drawn attention as the two are also competing to take over eBay Korea.

However, SSG.com is seen as the strongest contender as it is a retailer with more distribution channels. As a PEF MBK Partners, on the other

hand will be seeking to buy the firm at a low price and then sell it for a higher one to maximize profit.

MBK Partners declined to comment.

There is also a chance for collaboration between SSG.com and Affinity Equity Partner, which is already an investor in the retail giant.

Meanwhile, the estimated corporate value of the food delivery firm — and hence acquisition price — is swinging between 500 billion won and 1 trillion won.

Yogiyo is still growing and is turning a profit, but its market share is shrinking — declining 12 percentage points from 39 percent in January

2020 to 27 percent last February.

After the Fair Trade Commission ruled against a merger between Baedal Minjok and Yogiyo, the No.1 and No.2 delivery platform players, respectively, earlier this year, Delivery Hero — the owner of both — must sell Yogiyo by August.