Daw Kiwoom-CJ Group consortium named preferred bidder for JoongAng Ilbo, 3 months into workout

A consortium of Daw Kiwoom Group and CJ Group has been named the preferred bidder to acquire JoongAng Ilbo, the South Korean newspaper currently undergoing a corporate workout.

Samil PwC, the sale manager for JoongAng Ilbo, selected the Daw Kiwoom-CJ Group consortium as the preferred bidder Monday after evaluating all participants in the final round of bidding, according to Yonhap. The decision came roughly three months after JoongAng Ilbo entered the workout process — and on the same day the final bids closed, underscoring the pace at which the seller has moved.

All six prequalified bidders submitted final offers by the 3 p.m. deadline Monday, including the Daw Kiwoom-CJ Group consortium, Orion, Global Saea, OK Financial Group, eBroadcasting and Geumbo Development.

The Daw Kiwoom-CJ Group consortium is understood to have bid around 500 billion won ($372 million). Most other bidders are believed to have offered in the range of 300 billion to 400 billion won.

Samil PwC said it evaluated bids comprehensively, weighing acquisition price, financing capacity, the expected improvement to JoongAng Ilbo's financial structure, the outlet's public-interest value as a news organization, and employment stability.

The consortium structure was shaped by restrictions under the Newspaper Act. Both Daw Kiwoom and CJ Group are designated cross-shareholding restricted conglomerates, which bars either from holding more than 50 percent of a general daily newspaper. The two groups have yet to finalize how equity will be divided between them.

CJ Group currently holds a 9.24 percent stake in JoongAng Ilbo through its affiliate CJ Olive Networks, making it the third-largest shareholder. Should CJ Group complete the acquisition, the broader Samsung family — from which CJ traces its origins — would once again have a hand in running JoongAng Ilbo.

The sale will proceed through a third-party allotment of new shares. The acquirer will subscribe to newly issued shares to become the largest shareholder, with the proceeds flowing directly to JoongAng Ilbo to pay down debt and improve its financial structure.

The Daw Kiwoom-CJ Group consortium is expected to sign a conditional new-share subscription agreement and then complete the acquisition through subsequent steps, including approval from the financial creditors committee and a bondholders meeting.

JoongAng Ilbo applied to its creditors for a workout on June 19, and its financial creditors — led by principal creditor Hana Bank — voted to commence the process on July 10 with more than 75 percent approval by outstanding debt value.

JoongAng Ilbo has also put forward a self-rescue plan to raise 66.4 billion won by selling stakes in subsidiaries and land in Taean-gun, South Chungcheong Province, alongside a commitment by the founding family to relinquish management control.

The company aims to wrap up the sale by year-end in consultation with its creditors and formally exit the workout process.