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Videocon still in play for Daewoo

Videocon is still very much in talks with Daewoo to acquire its electronics business, report Indulal PM & Lalatentu Mishra.

business Updated: May 13, 2007 21:01 IST

Videocon is still very much in talks with Daewoo to acquire its electronics business. But it is still demanding a reduction in original bid price.

"We are talking to them and are in the final stages of negotiations," Videocon Chairman Venugopal N Dhoot confirmed to the Hindustan Times.

An investment banker close to Daewoo also reiterated that the deal with Videocon was being renogotiated.

Daewoo Electronics, part of Korea's Daewoo group put its assets on the block after the parent company went bankrupt. Haier of China, LG and Whirlpool PLC were initially in the race for Daewoo assets.

However, according to sources, Videocon has emerged as the front runner as it offered $759 million (Rs 3112 crore) for 97.6 per cent stake of Daewoo Electronics along with its partner Ripplewood Holdings LLC.

In October last year, Videocon and Daewoo creditors signed an MoU. However, earlier this year, creditors of Daewoo, which includes Korea Asset Management Corporation and Woori Bank had second thoughts on the deal after Videocon and its partner asked for a flat 20 per cent reduction on the original bid price.

"Both the sides want to take the deal forward. There will be a reduction in the deal, but not up to 20-25 per cent that Videocon is asking for," the banker close to Daewoo said.

Sources close to Videocon said the deal is now being reworked at $650-675 million. However, Dhoot did not confirm how much Videocon is willing to pay. "We will be finalising the deal very soon," he said.

Analysts said Daewoo acquisition is the best suit to Videocon's global ambitions, as the buyout will provide global rights of an international electronics brands to the company.

Daewoo operates in over 30 countries and its global assets have been valued between $3-3.2 billion. It produces LCD and Plasma CTVs, DVD & MP3 players, refrigerators, washing machines, air conditioners, microwave ovens and vacuum cleaners.

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First Published: May 13, 2007 20:17 IST