04-20-99 Hyundai, LG fail to narrow gap in chip merger deal
The chairmen of the Hyundai and LG groups yesterday failed to narrow their differences in the valuation of LG Semicon, heightening the possibility of a third-party intervention in the drawn-out semiconductor merger deal. Under intensifying government pressure for faster "big deal" consolidation reforms, Hyundai Chairman Chung Mong-hun and LG Chairman Koo Bon-moo met at a Seoul hotel for two hours with the Financial Supervisory Commission Chairman Lee Hun-jai as mediator. However, the two groups failed to reach a compromise on Hyundai Electronics Ind. Co.'s acquisition price of LG Semicon, with top aides of the two chairman saying that they had nothing to announce concerning the three-way meeting. Leaving the hotel after the talks, FSC Chairman Lee said, "It won't be easy (to settle the chip deal)."
According to FSC and industry sources, Hyundai offered to raise its quoted price to acquire the LG Group's 59-percent stake in LG Semicon, or 91 million shares, to 2 trillion won ($1.64 billion) from 1.2 trillion won previously. Yet LG stubbornly maintained its asking price of 3.2 trillion won, the sources said. Despite yesterday's failure to break the deadlock, FSC regulators expressed optimism that the Hyundai-LG chip merger deal may be finalized before top chaebol leaders meet with President Kim at Chong Wa Dae April 26.
"Chairmen Chung and Koo consented to the need to wind up the delayed merger talks as soon as possible," said an FSC spokesman. Last week, the FSC warned that the sale price of LG Semicon will be set by a group of bank-appointed experts if a compromise is not reached. President Kim's aides have even threatened to seize managerial control of Hyundai Electronics and LG Semicon by putting them under workout programs, unless the merger talks are finalized immediately. |
