| Website screencapture / Courtesy of Interpark |
E-commerce platform company aims to sell 28.14 percent stake
By Anna J. Park
Interpark, Korea's first-generation e-commerce business launched back in 1997, is up for sale in the M&A market, looking for a potential buyer of the online retail platform business.
According to the nation's investment banking industry, Interpark's founder and CEO Lee Ki-hyung, who is also the largest shareholder of the e-commerce firm, aims to sell an 28.14 percent stake of the company shares owned by himself and related parties.
Interpark confirmed the fact during a phone conversation with The Korea Times on Tuesday, adding that the company selected NH Investment & Securities recently as an underwriter to take care of the M&A process.
The market reacted positively to the news, as Interpark's stock price skyrocketed, upon hearing the news. The stock price jumped to 7,140 won ($6.24) on Tuesday afternoon as of 2 p.m. (Korea Time), an increase of more than 26 percent ― close to the Korean stock market's daily upper limit of 30 percent ― from the previous closing price.
With the price surge, the company's market cap also ran high on Tuesday. The market cap was estimated at around 458.7 billion won ($401 million) at Monday's closing, yet it is nearing 580 billion won as of Tuesday afternoon. If simply calculated from the afternoon stock price, the price for acquiring the 28.14 percent stake will be around 153.6 billion won.
Market watchers say Interpark's management views now as the most appropriate time to receive the highest value for selling the business, given that its stock price has already more than doubled this year ― even without considering the effect from Tuesday's price surge over the news. The stock price ended at 5,650 won on Monday's closing, which is a jump of over 259 percent from Jan. 4, when the price ended at 2,180 won.
The impressive increase is mainly due to the market's expectations about a hoped-for resumption of full-scale tourism and performing arts activities, as Interpark is a leading player in the local ticket reservation market for the performing arts sector as well as tourism packages sales.
While investor sentiment towards Interpark's corporate value as a key online platform business is becoming healthier lately ― as evidenced in the recent sale case of another e-commerce giant eBay Korea at 3.4 trillion won ― the firm has been suffering from dipping profits ― thus, the firm considers now is the right time to make the move to sell it.
While no one is sure about the list of potential buyers, big-tech firms like Naver and Kakao, other online retailers like 11Street, as well as major conglomerates and private equity firms (PEFs) are expected to show interest in acquiring Interpark.
| Interpark logo |
Launched in 1997, Interpark was once the country's largest online retailer back in 2003. The company's market share has been on a decline since 2004 as competition heated up in the local e-commerce industry.
Currently, the company holds around 2.4 percent of the online shopping market in Korea. Yet Interpark has maintained dominance in the ticket reservation market, holding some 70 percent of the market share.
However, its revenues deteriorated over the shocks from COVID-19, pushing the firm to log its first annual loss of 11.1 billion won last year, the first time it has done so in a decade. Interpark recorded annual profits every year from 2011 to 2019.