SEOUL, South Korea — Korean tire retailer Tire Bank has declared its interest in acquiring Kumho Tire Co. Inc., but industry pundits question whether the company has the financial resources to effect a deal, according to various Korean press reports.
Daejeon, South Korea-based Tire Bank is described as a family-owned business operating 400 outlets throughout Korea, generating roughly $345 million in annual sales.
The Korea Herald and other Korean newspapers reported March 27 that the tire retailer had placed its bid just four days before a deadline set by creditors to inject capital into Kumho.
The pending offer favored by Kumho's creditors is from Chinese investors, led by Qingdao Doublestar Tire Co. Ltd. The group reportedly has reached an agreement with Korea Development Bank (KDB) to acquire a 45-percent stake in the tire maker in a deal valued at $630 million, according to Doublestar representatives.
The reports on Tire Bank did not indicate whether the bid is for the 45-percent share of Kumho owned by the creditors' group or for the entire ownership.
Korean news agency Yonhap said Tire Bank CEO Kim Jeong-kyu announced the decision at a press conference in Daejeon, about 100 miles of Seoul.
The news agency reported Mr. Kim as saying he did not want to see the tire maker pushed toward ownership by a Chinese company.
Qingdao Doublestar's partners in its bid are three Chinese state-owned companies, Qingdao Conson Development (Group) Co. Ltd., Qingdao City Construction Investment (Group) and Qingdao Port International Co. Ltd.
Tire Bank's bid comes just three days before the deadline for the Doublestar bid to close. The Chinese group's bid, however, is facing opposition from labor unions representing Kumho workers in South Korea, according to other news reports.