Seoul - Arabstoday
SK Tele-com, South Korea\'s largest mobile-phone operator, and units of shipping magnate Kang Duk Soo\'s STX Group fell in Seoul trading after they disclosed plans to bid for Hynix Semiconductor. SK Telecom, the phone unit of billionaire Chey Tae Won\'s SK Group, retreated 3.7 per cent to 144,000 won, falling for a fifth day to the lowest closing level since March 2003. STX Offshore & Shipbuilding lost 4 per cent, while STX and STX Engine both fell 2.9 per cent. Morgan Stanley cut its stock rating on SK Telecom yesterday, underscoring a concern the nation\'s business groups are reviving over-expansion practices that led to a financial crisis in the late-1990s. Boom-and-bust cycles Article continues below The biggest sale of a Korean technology asset since 1999 will pit Chey against Kang for control of the world\'s second-largest maker of computer-memory chips — a sector marked by boom-and-bust cycles and billions of dollars in investments each year. \"Investors are worried about the deal given the target offers no foreseeable synergies for either bidder,\" said Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management, which oversees about $29 billion. \"Sentiment on those stocks will be weak until a decision\" on the successful bidder, he said. SK Telecom and STX Group said July 8 they submitted letters of interest. Korea Exchange Bank, which is leading the financial institutions seeking to unload their 2.4 trillion won (Dh8.3 billion) Hynix stake, said it expects to receive final bids by the end of August and sign a deal by year-end. Daiwa Securities Group last week cut its share-price estimate on SK Telecom by 6.1 per cent to 162,500 won, and Daishin Securities yesterday reduced its stock-price projection by 15 per cent to 200,000 won. While supporters praise the family-run Korean business groups known for pulling the country out of poverty after the 1950-1953 Korean War, the International Monetary Fund cited the debt-driven model as part of the reason the nation\'s economy landed in a financial crisis at the end of 1997. The stake of about 15 per cent being sold would make the buyer the biggest shareholder in the chipmaker. The disposal would also be the largest share sale of a Korean technology company since July 1999.