Korean beauty chain draws Goldman, five domestic final bidders

Goldman Sachs Principal Investment Area (PIA) and five South Korean companies, including four private equity firms, have made final bids for a minority stake in South Korea’s health and beauty franchise CJ Olive Young by the Dec. 16 deadline, according to PEF sources.

The stake up for sale is around 20% held by the company's family shareholders and valued at over 200 billion won ($183 million) by the company. Olive Young is planning to go public in 2022. 

The six final bidders include all the five shortlisted bidders, composed of Hyundai Department Store and four Korean PEFs, as well as the latecomer Goldman PIA. The PEFs are IMM Private Equity, STIC Investments, JKL Partners and Glenwood Private Equity. Hyundai Department Store is the only strategic bidder.

CJ Group's family owners are putting up for sale part of their shares in the beauty chain, including: a 17.97% stake owned by CJ Group Chairman Lee Jay-hyun’s son and heir apparent Lee Sun-ho; a 6.91% stake from the chairman’s daughter and executive vice president of CJ ENM Lee Kyung-hoo; and a 10.03% stake from the chairman’s brother Lee Jae-hwan.

CJ plans to select a preferred buyer of the non-management stake before the year-end, with Credit Suisse handling the sale.

The planned share deal is seen to be aimed at raising money to pay the owner family’s inheritance tax, and part of the group’s efforts to shed non-core assets, the sources said.

Separately, the food and entertainment-focused group is in the final stages of talks to sell the country’s No. 2 bakery chain Tous Les Jours to the Carlyle Group, and seeking to sell CJ Rokin, a Chinese logistics firm.

Alongside a clear timetable for the IPO, the fact that the share sale is related to parent CJ Group’s ownership restructuring has drawn interest in the non-controlling stake in Olive Young. About 20 PEFs, including TPG Capital, had submitted non-binding bids for a stake in the company last month.

As a unit of CJ Corp, the health and beauty store chain posted a slight drop in third-quarter profits and sales from a year before, hit by the pandemic-driven economic slowdown. But it managed to earn 17.6 billion won in net profit on sales of 453.6 billion won during the period.

Olive Young has 1,250 outlets across the country, selling a host of multi-brand cosmetics and health supplements with a 50% share of the domestic beauty market.

Write to Chae-Yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article.