Hyundai Group failed in an attempt to buy a stake in the largest South Korean builder

Hyundai Group Chairwoman Hyun Jeong Eun failed in an attempt to buy a stake in the largest South Korean builder, opening a potential challenge for the control of its largest company of its multimillion brother in law.

Shareholders who sell 35 percent of Hyundai Engineering & Construction Co. said yesterday it would end talks with Hyundai Group, due to concerns about its financing plans. You can now start negotiations with Hyundai Motor Group, which lost in the initial auction last month. The automaker is targeting Hyun late husband, brother Chung Mong Koo.

The collapse of the bid threatens its control Hyun Seoul-based Hyundai Merchant Marine Co., the largest unit of its group and owner of controlling stakes in seven subsidiaries, including Hyundai Engineering has a 8.3 percent the shipping company. Grab this game and combine it with actions already controlled by the Chung family could allow construction of a block in Hyundai Merchant nearly as large as Hyun.

"Hyundai Group to all and more in the purchase of Hyundai Engineering because the fate of the group is on the line," said Byun Sung Jin, an analyst at Mirae Securities Co. in Seoul assets. "This agreement from the beginning was a family quarrel."

Hyundai Engineering up to 6 percent in Seoul trading on speculation of Hyundai Motor would invest more in the company of Hyundai Group. Which rose 2.1 percent to close at ₩ 71,600, the highest close in over a month. Hyundai Merchant, the second largest South Korean shipping company, rose 0.9 percent, at ₩ 40,100.

Family Feud

Hyundai Group and Hyundai Motor rival bids for the game Hyundai Group Engineering extended a dispute than a decade in one of the most powerful families in South Korea. Hyundai Group has about 5.5 trillion won ($ 4,800,000,000) for stocks outpacing supply the automaker for about 400 million won, two people familiar with the matter said last month. The offer was more than double the market value.

Hyundai Engineering shareholders decide whether to start talks with Hyundai Motor Group at a later date, Korea Exchange Bank, one of the investors said yesterday. It also offered to act as intermediaries between the Hyundai Group and Hyundai Motor Group on the fate of the participation of the construction company Hyundai Merchant if talks with the automaker to begin.

"The decision to end negotiations goes against the terms of sale, Hyundai Group said in a statement via email. "We will seek a fair decision through legal channels."

Hyundai Motor Group expects that shareholders will proceed so that the rules for bidding, Hwa Won Lee said a spokesman. He declined further comment. Hyundai Motor Co. fell 1.7 percent to ₩ 177 500.

Hyundai Merchant stakes

Chung could marry participation in Hyundai Merchant Hyundai Engineering with 25.5 percent held by shipyard Hyundai Heavy Industries Co., controlled by his younger brother, and 5 percent owned by KCC Corp., founded by an uncle who tried to block the succession of Hector. The three units together almost coincide with the 40 percent owned by Hyun and the Hyundai Group. Another 5 percent is held by the shipping company and its employees.

"The immediate problem for the Hyundai Group could defend their control of Hyundai Merchant," says Ahn Soo Woong, head of research at LIG Investment & Securities Co. in Seoul. "Losing out in Hyundai Engineering also the effort to double the Hyundai Group to grow their business."

The husband's suicide

In April, Hyun set a goal of increasing sales of the Hyundai Group of 70 trillion won in 2020 from ₩ 10,500,000,000,000 last year by strengthening its three core businesses - logistics, finance and infrastructure. Hyun took over Hyundai Group after her husband committed suicide in 2003.

Hyundai Motor was separated from the main group of Hyundai in 2000, after Chung was rebuffed by his father as heir in favor of her husband Hector. A year later, the creditors took control of Hyundai Engineering, Hyundai Group's flagship, as the Seoul-based manufacturer with debt problems. These creditors are selling their shares.

"It will not be easy for shareholders to find a compromise on the participation of Hyundai Merchant," Byun said Mirae Asset. "Hyundai Group and Hyundai Motor Group have not been offered as the high share prices of Hyundai Engineering if you are not much bigger reasons."

Hyundai also said yesterday it plans to raise about ₩ 2000000000000 sale of shares in a French unit of Hyundai Merchant. Seven potential investors have expressed interest, he said. Hyundai Merchant also said yesterday it will sell 10.2 million new shares in itself for ₩ 32.000 each, 19 percent less than yesterday's closing price. Yesterday's announcement talks about Hyundai Engineering did not affect sales of Hyundai Group, said.

French loan

Hyundai Engineering Shareholders broke off talks after the Hyundai Group to ask three times for more details about a loan of 1.2 trillion won Paris-based Natixis SA. Hyundai Group provided documents without giving a copy of the agreement, said on 17 December. The documents were "insufficient", said the Korea Exchange Bank the same day.

Hyundai Motor Group said October 19 that it planned to invest 10 trillion won in Hyundai Engineering if they gained control of the builder to help drive sales fivefold in a decade. The automaker to support the company's existing businesses and to encourage construction of new markets such as wind energy and resource development.

"Hyundai Motor Group has more synergies for Hyundai Engineering, Hyundai Group, not to mention more help in raising funds and a stronger financial base," said Lee Chang Keun, an analyst at Hana Daetoo Securities Co., in a report published today.