PEFs zoom in on Korean drama producer as strategic buyers pull back
Jun Ho Cha
Aug 27, 2020 (Gmt+09:00)
A pre-IPO share sale by South Korean TV drama producer JTBC Studios Co. Ltd. has attracted Bain Capital Credit, TPG Capital and a few Korean private equity firms, amid lack of interest from strategic buyers.
A dearth of strategic buyers, however, may not signal a lower valuation for the entertainment unit of the country’s leading media group. Some Korean private equity houses put the value of JTBC Studios at around 1 trillion won ($843 million), more than twice the valuation proposed by the company, and are thus emerging as strong candidates, according to industry banking sources on August 26.
JTBC Studios is selling a stake of up to 30% in itself in a pre-IPO placement to fund its content and streaming service expansion. Prior to the share placement, it will absorb the drama investment operation of Jcontentree Corp., its biggest shareholder.
The shares on offer are unlikely to come with management rights, putting off strategic buyers such as the country’s biggest internet portal Naver Corp and top-ranked mobile carrier SK Telecom Co. Ltd.
But they may provide a rare opportunity to invest in a content production company with a strong track record. The producer of the recent hit TV series The World of the Married, Itaewon Class and Sky Castle has been benefiting from growing viewership of Korean TV series and movies on online platforms such as Netflix Inc.
The size of the stake up for sale will be determined after binding bids are submitted. JTBC may split the share sale to several buyers.