UPDATE 1-Two bidders warn they may quit $6bln Woori sale

* Two bidders demand govt drop significant premium request

* Govt says sales guideline not prepared yet

* Woori shares close up 0.7 pct vs 0.5 pct rise in KOSPI

(Adds govt comments, details)

SEOUL, Dec 13 (BestGrowthStock) – Two consortia vying for South
Korean government’s 57 percent stake worth $6 billion plus of
Woori Finance Holdings (053000.KS: ) warned on Monday they would
drop out of bidding unless the government loosens sales criteria.

The request may deal a fresh blow to protracted Woori sale,
which has been complicated due to the sheer size of the deal and
the sale of two regional banks which are being offered along with

The Woori sale would mark the end of South Korea’s efforts to
privatise banking sector after it spent billions of dollars of
taxpayers’ money to bail out financial institutions in the wake
of 1997-98 financial crisis.

“We note that the government plans to demand a significant
premium to the current market value of Woori and wants to have
competing bids for at least a 28.5 percent stake,” two bidders
formed by Woori employees and customers said in a joint

“As we are more interested in participating in the Woori
privatisation, rather than buying a controlling stake in the
group, it is difficult for us to pay hefty premium. In addition,
there are no other viable bidders aiming to buy the controlling
stake except the two consortia, which all would make the auction
a failure,” the statement said.

“Unless the government loosens the sales criteria, there’s no
point of us wasting some 20 billion won ($17.5 million) in
advisory fees and participate in the bidding.”

South Korea has yet to start the second round of the bidding
after it received interest from 11 bidders in the first stage of
the sales process.

A person who has direct knowledge of the deal said last week
that the second round of bidding may be delayed and miss the
end-December target of selecting short-listed bidders, as the
government has yet to come up with detailed sales guidelines.

Private equity firm Carlyle Group [CYL.YL], Macquarie Group
(MQG.AX: ) and MetLife Inc (MET.N: ) are among the 11 bidders who
have expressed their interest, according to the person.

“We haven’t sent an official request for the proposal to
potential investors to participate in the second round of bidding
because the criteria is not ready yet,” said an official at the
Korea Deposit Insurance Corp, the largest shareholder of Woori,
on Monday.

The official denied that the guideline will ask bidders to
pay for hefty premium for taking a controlling stake.

Bidders are asked to take at least 4 percent of Woori and the
government is selling two regional banking arms of Woori–
Kwangju Bank and Kyungnam Bank.

Shares in Woori closed up 0.7 percent, broadly in line with
the wider market’s (.KS11: ) 0.5 percent rise.

(Reporting by Miyoung Kim; Editing by David Chance)

UPDATE 1-Two bidders warn they may quit $6bln Woori sale