Singapore-based alternative investment firm Hillhouse Investment’s push to acquire Igis Asset Management, a major South Korean real estate investment manager, might not be certain amid growing controversy over the sales process.
On Monday, Hillhouse was selected as the preferred bidder to acquire the asset manager with an offer of 1.1 trillion won ($746 million), outrunning rival bidders Heungkook Life and Hanwha Life.
Heungkook Life, however, filed a police report Thursday against Igis shareholders involved in the sale and lead manager Morgan Stanley, alleging that the bidding process was conducted unfairly.
The insurer says that the sell-side advisers structured the deal to favor Hillhouse, and that its own bid price was shared without consent, effectively triggering a bidding war. Heungkook Life was the second-highest bidder with an offering price of 1.05 trillion won.
The National Pension Service has reportedly also voiced dissatisfaction with how the deal was handled.
According to local media reports, the NPS is considering withdrawing the funds it has entrusted to Igis, claiming that sensitive information, such as fund reports and performance-fee details, was provided to the final bidders without prior consent during the sale process.
With the NPS serving as one of Igis’ key capital providers, a withdrawal by the NPS would significantly change the company’s valuation. A resulting drop in assets under management would necessitate a reassessment of the firm’s value, raising the possibility of renegotiation or the deal falling through.
Amid the latest hiccups surrounding the deal, Hillhouse could face a hurdle in securing regulatory approval for the takeover.
An entity seeking to become a major shareholder of a financial investment business here must secure approval from the Financial Services Commission.
According to the regulators, Igis has not yet applied for approval of the change in its largest shareholder to Hillhouse.
Hillhouse initially aimed to submit its application for review within the year, but industry watchers project that delays now appear unavoidable.
