CJ Olive Young’s share of the total family is expected to be sold to private equity

[CJ올리브네트웍스] Olive young store images (1) 0

It is expected that the CJ Group will sell the shares of CJ Olive Young owned by the head family to a private equity fund. CJ, which is promoting CJ Olive Young’s pre-IPO, closed its bidding on the 16th and has been conducting a review to select a target for sale.

According to the industry on the 23rd, CJ Group and the sale supervisor Credit Swiss (CS) selected Glenwood PE as the target of the sale of CJ Olive Young’s stake, and are in the process of final coordination. As early as the 24th, it is known that it will sign a stock purchase agreement (SPA).

However, it is unlikely that the exact share of the sale will be confirmed until the SPA is completed. CJ Olive Young is 55.01% (55,55,0559 shares) of CJ Corp., 17.97% of CJ CheilJedang manager Lee Sun-ho, the eldest son of Chairman Lee Jae-hyun (180 minutes 1948 shares), and 6.91% (692,780 shares) of CJ ENM vice president Lee Kyung-hoo, the eldest daughter of Chairman Lee. Note). In addition, Chairman Lee’s younger brother Lee Jae-hwan, CEO of CJ Powercast, and his two children own 10.03%, 4.58%, and 4.58% shares, respectively. The shares sold this time are part of the total family shares, excluding shares held by CJ Corporation.

At this time, it is not clearly known at what level the stake will be sold. In the industry,’+α’ is being discussed in 28% of the shares of General Manager Lee Seon-ho and Lee Jae-hwan, but it is expected that the total stake in the sale will be disclosed only after the SPA is signed. Some expect that Lee Jae-hwan may not participate in the stake sale.

An industry insider explained, “In the case of CEO Lee Jae-hwan, it seems that he may not sell his stake,” and said, “We will have to watch whether to sell all, only part of it, or not.” In the industry, even if the SPA is signed, it is highly likely that the share of each family member’s sale will not be disclosed immediately.

The sale of CJ Olive Young’s stake has attracted public attention in that it is directly connected to the management succession of CJ Group. Various observations have been made since the sale of CJ Olive Young for several years. However, through a pre-IPO, CJ Group chose to sell the shares of the total family including manager Lee Seon-ho while maintaining management rights.

CJ Olive Young is evaluated as a unique presence of H&B in Korea with 1,252 stores nationwide (as of the third quarter). Although offline store sales were hit by this year’s new coronavirus infection (Corona 19), it maintains its No. 1 position in the market thanks to the online business growth that has been strengthened since last year. As of 3Q, CJ Olive Young’s online sales accounted for 18.8%, up 3.3 percentage points from 15.3% in the first half of this year.

As it has a stable platform, the market’s interest in CJ Olive Young’s pre-IPO is high. In fact, a total of six companies from IMM PE, Stick Investment, Goldman Sachs PIA, JKL Partners, Glenwood PE, and Hyundai Department Store Group participated in the pre-IPO bid held by CJ Group on the 16th.

Meanwhile, in the industry, manager Lee Seon-ho is expected to use the funds secured from this sale as a live shot necessary for management succession.