Electrolux agrees to Daewoo Elec takeover talks
Sweden's Electrolux AB has agreed to begin takeover talks with creditors of South Korea's Daewoo Electronics Co Ltd, but a legal action by another bidder could challenge the deal.
June 27, 2011 / 14:31 IST
Sweden's Electrolux AB has agreed to begin takeover talks with creditors of South Korea's Daewoo Electronics Co Ltd, but a legal action by another bidder could challenge the deal.
An official at Woori Bank, Daewoo's lead creditor, said a holding company of Iran's Entekhab Industrial Group had filed for a court injunction to prevent creditors from cancelling a USD 513 million takeover deal.The unlisted Iranian appliance maker was picked as a preferred bidder for Daewoo last year, beating rival Electrolux, but its transaction fell apart in late May due to disputes over sale price and its funding plan.People with direct knowledge of the deal said creditors would review whether to enter into talks with Electrolux because the Swedish company had attached some conditions to the agreement. They declined to elaborate.The South Korean home appliance maker's creditors have experienced several failed sale attempts, including the latest deal with Iran's Entekhab.One of the sources told Reuters that the creditors had to wait for the local court's decision whether to accept the injunction request before moving to the negotiation table with Electrolux."Many believes (Entekhab's) legal action is to return its down payment of around 50 billion won," the source said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
