Global private equity firm Kohlberg Kravis Roberts (KKR) is said to be in talks to buy a nearly 60 percent stake in South Korean major food company Ourhome held by its owner family members that have been in dispute with the other siblings over the company’s management control.

According to sources on Monday, KKR recently discussed with La Defense Partners, the stake seller’s lead advisor, to acquire a 58.62 percent stake in Ourhome from its former vice chairman and CEO Koo Bon-sung (38.56 percent) and his sister Mi-hyun (20.06 percent), the eldest sister of the Koo family.

La Defense Partners last week sent a teaser letter to a handful of local and foreign potential buyers as part of a limited competitive bidding process for the nearly 60 percent equity held by the sibling.

Sources said the seller hopes to receive 1 to 2 trillion won ($1.58 billion) for the stake, but multiple investment banking experts estimate the deal at less than 1 trillion won given the company’s weak performance in its restaurant and catering businesses.

Ourhome, which was separated from LG Group in 2000, had maintained steady operating profits of 60 to 80 billion won on average every year from catering, restaurant, and food materials business before turning red in 2020 due to the pandemic. The seller expects the company’s business would return to the pre-Covid levels this year after it swung to an operating profit of 25.6 billion won last year.

The stake seller plans to have preliminary bidding in August to select a preferred negotiator during September.

Koo Bon-sung, the only son of Ourhome’s owner family with the largest stake, was removed from his post in June last year after his three sisters joined forces to dismiss him citing the company’s poor performance under his control and his road rage scandal. But the eldest daughter Mi-hyun last month joined her brother to sell her stake, reigniting a new round of family dispute.

Citing the latest development in the stake sale process, La Defense Partners issued a statement on Monday to urge the current management of Ourhome to cooperate the sale after denying the allegation that Bon-sung is trying to retake the helm of the company. But the current management under the control of the youngest sister Ji-eun remains suspicious about the intension of the two siblings’ stake sale attempt, saying that it may be their tactics to gain an upper hand in a proxy war.

Ourhome is a major catering and food service company devoted to Korea’s No. 4 conglomerate LG Group and founded by Koo Ja-hak, the third son of LG Group founder Koo In-hoe in 1984.

By Park Chang-young, Jin Young-hwa and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]