SK Telecom Co. Ltd. cancelled the acquisition of 30% stake in CJ Hello Co., Ltd. from CJ O Shopping Co., Ltd..
July 24, 2016
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SK Telecom Co. Ltd. (KOSE:A017670) agreed to acquire 30% stake in CJ Hello Co., Ltd. (KOSE:A037560) from CJ O Shopping Co., Ltd. (KOSDAQ:A035760) for approximately KRW 500 billion in cash on November 2, 2015. SK Telecom will acquire 23.23 million shares of CJ Hello. The Board of Directors of CJ O Shopping passed a resolution for the transaction on November 2, 2015.
CJ O Shopping's remaining stake of 23.9% in CJ Hello will later be acquired by SK Telecom through call and put options. Upon acquisition of CJ O Shopping's stake in CJ Hello, SK Telecom plans to push for merger of SK Broadband and CJ Hello. The exchange ratio of CJ Hello shares to SK Broadband shares is fixed at 0.4756554 per CJ Hello share. SK Telecom will have 75.3% stake in the merged entity, while CJ O Shopping will hold 8.4%. The merger is scheduled to be approved at the Board of Directors Meeting of SK Telecom and CJ Hello to be held in early 2016. Upon successful completion of the merger, SK Telecom will be backdoor listed through CJ Hello. As of December 31, 2015, the approval of relevant government agencies for the share purchase has not been completed yet and the deal closing will depend upon the status of the pre-requirements including the government agencies approval. As of February 26, 2016, the shareholders of CJ Hello approve the transaction. As reported on April 1, 2016, SK Telecom amended the number of shares to be acquired from the transaction to 29.91 million. As of March 31, 2016, the transaction is currently in the process of assessment for specific approval from the related institution such as Ministry of Science, ICT and Future Planning and thus the schedule change was amended. The FTC approval is still pending. South Korea's Fair Trade Commission rejected the transaction on July 7, 2016. As of July 18, 2016, South Korea's antitrust watchdog rejected the acquisition. As of November 9, 2015, the transaction is expected to complete on April 1, 2016.
Morgan Stanley acted as financial advisor for SK Telecom. Credit Suisse acted as financial advisor for CJ O Shopping. PricewaterhouseCoopers Korea acted as external evaluation company in the transaction.
SK Telecom Co. Ltd. (KOSE:A017670) cancelled the acquisition of 30% stake in CJ Hello Co., Ltd. (KOSE:A037560) from CJ O Shopping Co., Ltd. (KOSDAQ:A035760) on July 25, 2016. The transaction was cancelled, as the pre-requisite conditions of the transaction seems objectively impossible due to disapproval decision by the fair trade commission.
LG HelloVision Corp, formerly CJ Hello Co Ltd, is a Korea-based company principally engaged in the provision of broadcasting and communication services. The Company operates its business through five segments. The Broadcasting segment provides analog and digital cable television (TV) services through Hello TV products. The Value-Added Service segment provides services such as Internet phone, terminal sales and management support for general cable broadcasting business through products such as Hello Phone and Hello Mobile. The Advertisement segment provides local advertisements, home shopping, and data home shopping channel transmission services through Hello TV Woori neighborhood products. The Internet segment provides Internet access and Internet phone service through products such as Hello Internet. The Product Sales segment is engaged in businesses such as mobile virtual network operator (MVNO) wireless telephone terminals sales, business to business (B2B), and rentals.
LG HELLOVISION CORP. 
