Golden Spoon Investment Portfolio - Chapter 506

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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506. Then let’s submit our bid like this.

With Seok-won seated in the center, one leg crossed, Yun Ki-hun, Eom Tae-jun, and Yu Hyun-seok occupied the sofas on either side.
Yun Ki-hun placed the approval document on the table and spoke.

“This is the final bid amount calculated by the Task Force team.”

[₩ 2,100,000,000,000]

Seok-won picked up the approval document, confirmed the figure written there, and opened his mouth as he looked up.

“Two trillion one hundred billion won… that’s one hundred billion won more than the government’s minimum bid amount.”

Then Yun Ki-hun, leading the acquisition Task Force team, calmly explained the basis for calculating the bid amount.

“During the bidding preparation process, we re-evaluated the assets held by Minguk Life and found they amount to only 1.7 trillion won, significantly less than what the Financial Supervisory Commission previously investigated.”
“I understand they hold quite a few prime real estate properties, including the 63 Building located in Yeouido. Is that really all?”
“Yes. As you know, real estate prices have dropped significantly due to the aftermath of the foreign exchange crisis, so the appraised values have also decreased.”

In the midst of the ongoing IMF crisis, companies with depleted liquidity relied on selling their assets as the easiest and fastest means to secure cash.
As corporations dumped properties en masse—from manufacturing plants to corporate headquarters—the domestic real estate market was literally collapsing day after day.

‘Even the 63 Building, a Seoul landmark, cannot escape the plunge when the entire market is crumbling.’

Taking advantage of such market conditions, Jung Gyu-chul, president of Blue Hole Construction, who had received generous ammunition from Seok Won-han, was sweeping up prime real estate throughout Seoul at bargain prices.

‘Not long ago, he was negotiating to acquire the Seoul Hilton Hotel and Suyeongman Reclaimed Land owned by Daegwang Group as a package.’

Recalling Jung Gyu-chul, who had initially been cautious but was now gleefully snatching up buildings and land like playing Monopoly, Seok-won suppressed an inward chuckle and refocused on Yun Ki-hun’s explanation.

“Even if the domestic real estate market is expected to bottom out and rebound in the future, we cannot reflect that in our valuation since we cannot predict whether that will occur next year or several years from now.”

Unlike Seok-won, who knew that real estate prices would skyrocket seemingly overnight after their endless collapse, most people believed the real estate market would struggle to recover for at least several more years.
Therefore, they had no choice but to conservatively evaluate the real estate assets held by Minguk Life.

“Additionally, although the government stated it would inject public funds, we also factored in that the acquirer must bear a certain portion of the 2.9 trillion won in non-performing assets.”

Various other factors were listed in the documents, and given that we’d assembled a task force of specialists from each field for the Minguk Life acquisition, I could see the amount was quite reasonable.
I set down the approval stamp in my hand and asked.

“How many other companies are participating in this bidding besides us?”

Yun Ki-hun, the executive director, answered immediately.

“It appears that eight companies will respond to the bidding, including the American Metropolitan Life.”
“That’s quite a number.”
“On the surface, yes, but Metropolitan Life is closely connected to Chairman Shim In-yeol, who mismanaged Minguk Life, so the government is reluctant about them. Moreover, they’ve had friction with the Financial Supervisory Service during the restructuring process, so it’s fair to say they’ll have difficulty winning the bid.”

I nodded slightly in agreement.

“True. If Metropolitan Life were to acquire Minguk Life, there would inevitably be considerable gossip.”
“Exactly. Excluding Metropolitan Life, most of the others are vulture funds that acquire troubled companies and resell them after normalizing operations, or they’re organizations with weak financial capacity, so we have a relative advantage.”
“The vulture funds are approaching this with their eyes on Minguk Life’s real estate holdings rather than normalizing the company itself.”
“That’s our assessment as well. So most of them will likely submit bids below 1.7 trillion won, which is the appraised value of the real estate assets.”

Leaning back against the plush sofa, I looked at Yun Ki-hun.

“Didn’t you say last time that TG Group and HW Group were also interested in acquiring Minguk Life?”
“That’s right, but TG is struggling with the semiconductor mega-deal in progress with Hyunwoo Group, so they appear to lack the capacity to focus on Minguk Life and will likely skip this bidding.”

TG Group, which had decided to abandon the semiconductor business under government pressure, had been conducting sales negotiations with Hyunwoo Group over the past several months.
However, the price gap between what each side wanted was too large, and they were making little progress in narrowing their differences.
Then the government stepped in again, proposing a mediation plan: “Let’s determine the price by taking the arithmetic mean of the final prices each side has submitted.”

“If they’re asking TG Semiconductor, with equity value approaching 4 trillion won, to be handed over for just over 2.56 trillion won—half of that—I’d be furious too.”
“I’d be angry as well, but with such intense pressure to wrap up the mega-deal quickly, TG Group will ultimately have no choice but to back down.”
“I suppose so.”

I answered with a bitter expression and crossed my arms.

“Setting TG aside, didn’t HW Group show strong acquisition intent, with Chairman Kwon Seung-beom even revealing his interest in multiple press interviews?”

This time, Yu Hyun-seok, the department head, who was sitting on the left sofa next to Eom Tae-jun, the financial director, interjected and answered instead.

“The group owner is actively pursuing the acquisition, but the Japanese partner company in the consortium is the weak point.”
“If you’re talking about the Japanese partner that formed a consortium with HW Group, are you referring to Kyoei Life?”
“That’s correct.”
“I understand Kyoei Life is the tenth-largest life insurance company in Japan, so what’s the problem?”

Yu Hyun-seok explained the situation as all eyes turned toward him.

“It’s a fairly large life insurance company with deep roots, having been established in 1947, and total assets of 5.246 trillion yen, but its solvency ratio stands at 300%, placing it at the lowest tier among Japanese life insurers.”
“Is their financial condition really that dire?”

At the surprised question, Yu Hyun-seok’s voice grew notably grave as he continued.

“As their management situation deteriorated, S&P recently downgraded their credit rating significantly to B, which is below investment grade.”

Seok-won suddenly recalled from his memories before regression that around next year, the world’s largest life insurance company would collapse in Japan.

‘My memory is hazy on the exact details, but it seems to be Kyoei Life.’

With total assets exceeding 5.246 trillion yen—well over 72 trillion won in Korean currency—it was a staggering sum that would certainly shake the Japanese stock market.
Having fortunately recalled what he’d nearly forgotten, Seok-won etched the name Kyoei Life deeply into his mind.
Meanwhile, Eom Tae-jun, the financial director sitting beside Yu Hyun-seok, spoke to him.

“The government surely isn’t unaware of Kyoei Life’s condition. No matter how high a price they submit, it will be difficult to receive a favorable evaluation.”
“That makes sense—they can’t hand over a company they’ve revived with massive public funds to a troubled enterprise.”

As Seok-won agreed with the assessment, Yun Ki-hun spoke with confident certainty about winning the bid.

“Therefore, our assessment is that 2.1 trillion won would be sufficient to secure the acquisition of Minguk Life.”

Even in his own judgment, unless global insurance giants like AIG or France’s AXA suddenly entered the bidding, Eldorado Fund appeared objectively to be in the most advantageous position among the participating companies.
The reason for positioning Eldorado Fund rather than Daehung Venture Capital as the primary acquirer of Minguk Life was to circumvent various legal restrictions within the domestic market.
Seok-won tapped his fingertip thoughtfully against the sofa’s armrest for a moment before lifting his head to speak.

“Do you have a pen?”

Yu Hyun-seok, seated to his left, quickly retrieved a ballpoint pen from his inner pocket and extended it with both hands.

“Right here.”

Seok-won accepted the pen and leaned forward in his seat, deliberating once more with utmost care.
Then, as if seized by resolve, he drew his pen across the bid amount written on the approval sheet before him, striking it out with several decisive strokes.

“!”

At Seok-won’s sudden action, all three men turned to stare at him with expressions of shock.
Without hesitation, Seok-won then wrote a new figure beneath the crossed-out bid amount.

[₩ 2,300,000,000,000]

“Let’s submit the bid at this amount.”

As Seok-won set down his pen and spoke, none of them could conceal their bewilderment.
It was Yun Ki-hun, the Managing Director, who recovered his composure first and hastily opened his mouth.

“2.3 trillion won is far too much, isn’t it!”
“Exactly. The assets are only worth 1.7 trillion won—spending an additional 600 billion is, by any reasonable calculation, a massive overpayment.”

Eom Tae-jun, the Finance Director, also widened his eyes and displayed a negative stance.
Yu Hyun-seok, the Department Head, likewise refrained from speaking carelessly, though he clearly agreed that the bid price was far too high.
Yet Seok-won leaned back in his chair and spoke in an even tone.

“We might very well secure Minguk Life at the original price you three proposed. And I acknowledge that we hold favorable conditions compared to other competitors. But what if, by some chance, we fail to win the bid?”

Catching the implication, Yun Ki-hun’s expression hardened slightly.

“You’re suggesting that others could submit a higher bid amount.”
“That’s possible. Or the government could reject the sale entirely if they’re dissatisfied with the offered price.”

Seok-won shrugged and countered.
At this, Eom Tae-jun, the Finance Director, objected as if such a thing were impossible.

“The government would want to resolve this troublesome matter as quickly as possible—surely they wouldn’t do that.”
“One of the government’s stated principles for this sale is minimizing public fund injection. Given that public opinion is already negative about using taxpayer money to cover corporate mismanagement, they won’t want to be accused of a fire sale. They’ll push for a higher price.”
“Hmm….”

Upon reflection, Eom Tae-jun realized this was entirely plausible and fell silent.
Meanwhile, Yun Ki-hun still shook his head with a skeptical expression.

“Even so, 2.3 trillion won is simply too much.”
“If the government rejects the proposed price and voids the bidding, the next auction won’t happen any sooner than a month or two at the earliest.”
“That’s quite likely.”
“By then, the Seoul Administrative Court will have issued a ruling on Chairman Shim’s lawsuit challenging the Financial Supervisory Commission’s corrective measures for Minguk Life, including the stock cancellation. If Chairman Shim loses as expected, the foreign mega life insurance companies that have been watching from the sidelines will jump into the bidding. That would make the competition far fiercer than it is now.”

If the Financial Supervisory Commission won the court case, all risk would vanish from handling Minguk Life, so as I said, there was a strong possibility we’d face an intense bidding war against the foreign mega life insurers who were still gauging the situation.

“If that happens, we might have to bid even higher than a new lower amount, so it’s better to propose a price that satisfies both the government and the Financial Supervisory Commission now and secure Minguk Life for certain.”

Though the International Financial Center building to be constructed in Yeouido is far larger in scale, it had only a 99-year usage right to the land yet was traded for 4.1 trillion won in 2021, so betting 2.3 trillion won on acquiring Minguk Life with just the 63 Building alone was certainly worthwhile.
Seeing that my resolve appeared unshakeable, Yun Ki-hun had no choice but to follow the directive.

“If that is your wish, we shall proceed as you say.”

When the other two stopped objecting and nodded in agreement, I wore a satisfied expression.

“Then let’s submit the bid this way.”

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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