Reuters: Private Equity: UPDATE 1-Hi-mart shares surge after Lotte picked as preferred bidder

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UPDATE 1-Hi-mart shares surge after Lotte picked as preferred bidder Jul 4th 2012, 03:08 Tue Jul 3, 2012 11:08pm EDT (Recasts with confirmation, stock surge) SEOUL, July 4 (Reuters) - Shareholders in Hi-mart Co Ltd have picked South Korea's Lotte Shopping Co Ltd as their preferred bidder for a controlling stake in the nation's biggest electronics retailer, sending shares in Hi-mart soaring. The move follows their rejection of Seoul-based private equity fund MBK Partners' request to extend its exclusive negotiating rights to the 65.3 percent stake that was valued at around $700 million as of Tuesday's close. A source with knowledge of the matter told Reuters, however, that MBK walked away from the auction after it found a worse-than-expected deterioration in the business. Hi-mart shares climbed 13 percent and largest shareholder Eugene Corp was up almost 15 percent in morning trade, as Lotte, the operator of South Korea's biggest department store chain, has been viewed by the market as a much better fit for Hi-mart. Lotte's shares were up 4 percent. South Korean stocks have a daily trading limit of 15 percent. Shares in Hi-mart had lost a fifth of their value between June 20 and Monday, hit by the original decision to pick MBK as preferred bidder and a steep drop in earnings. MBK, run by former Carlyle Asia Partners president Michael Kim and one of South Korea's better known funds, had been selected just last week to buy the stake in Hi-mart, but requested more time after it saw very recent performance data, a second source familiar with the matter said. (Reporting by Joyce Lee and Ju-min Park; Editing by Edwina Gibbs) Link this Share this Digg this Email Reprints

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