CJ Olive Young’s stake in the total family is expected to be sold to a private equity fund

[CJ올리브네트웍스] Images of the young olive store (1) 0

The CJ Group is expected to sell the shares of CJ Olive Young owned by the main family to a private equity fund. CJ, which is promoting CJ Olive Young’s pre-IPO, closed its bid on the 16th and has been conducting a review to select a target for sale.

According to the industry on the 23rd, CJ Group and sales supervisor Credit Swiss (CS) selected Glanwood PE as the target for the sale of CJ Olive Young shares, and are working on final coordination. Already on the 24th it is known that a share purchase agreement (SPA) will be signed.

However, it is unlikely that the exact participation of the sale will be confirmed until the SPA is completed. CJ Olive Young is 55.01% of CJ Corp. Note). Additionally, President Lee’s younger brother, Lee Jae-hwan, CEO of CJ Powercast, and his two sons each hold 10.03%, 4.58% and 4.58% shares. The shares sold this time are part of the family’s total shares, excluding shares held by CJ Corporation.

At this time, it is not clearly known what level of stake will be sold. In the industry, ‘+ α’ is being discussed on 28% of the shares of General Manager Lee Seon-ho and Lee Jae-hwan, but the full share of the sale is expected to be disclosed only after the signing of the SPA. Some hope that Lee Jae-hwan will not participate in the sale of the stake.

An industry insider explained, “In the case of CEO Lee Jae-hwan, he can’t seem to sell his stake” and said, “We’ll have to see if we sell all of it, just part of it or not.” In the industry, even if the SPA is signed, it is highly likely that each family member’s share of the sale will not be immediately disclosed.

The sale of the CJ Olive Young stake has attracted public attention as it is directly related to the CJ Group’s administrative succession. Several observations have been made since the sale of CJ Olive Young over several years. However, through a prior initial public offering, CJ Group decided to sell the shares of the entire family, including manager Lee Seon-ho, keeping the management rights.

CJ Olive Young is assessed as a unique H&B presence in Korea, with 1,252 stores nationwide (as of Q3). Although offline store sales were affected by this year’s new coronavirus infection (Corona 19), it maintains its number one position in the market thanks to the growth of the online business that has strengthened since last year. As of 3Q, CJ Olive Young’s online sales accounted for 18.8%, an increase of 3.3 percentage points from 15.3% in the first half of this year.

As it has a stable platform, market interest in CJ Olive Young’s pre-IPO is high. In fact, a total of six companies from IMM PE, Stick Investment, Goldman Sachs PIA, JKL Partners, Glenwood PE and Hyundai Department Store Group participated in the pre-IPO offering held by CJ Group on the 16th.

Meanwhile, in the industry, manager Lee Seon-ho is expected to use the funds raised from this sale as a real opportunity needed for management succession.