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Yogiyo Food Delivery Platform Preliminary Bidding Attracts Retail Giants, PEFs, Hotel Booking App

The race to acquire Yogiyo has attracted retail giants, large private equity funds and even a hotel booking app operator, raising expectations for the food delivery app n ° 2 in South Korea with an estimated price of 2,000 billion won ($ 1.8 billion).

German Yogiyo operator Delivery Hero and its sales consultant Morgan Stanley have received preliminary offers from Korean retail giants Shinsegae and Lotte, accommodation booking platform Yanolja and several fund companies. private equity, according to sources in the investment banking industry. PEF bidders would include Seoul-based MBK Partners and foreign names TA Associates, CVC Capital Partners, Permira and TPG Capital.

Yogiyo’s selling price is estimated to be between 1,000 billion won and 2,000 billion won.

Despite the hefty price tag, Yogiyo is an attractive catch for competitors.

Shinsegae and Lotte, two of Korea’s largest retail companies, which operate both hypermarket and grocery chains, are said to be after Yogiyo to leverage the apps operator’s national delivery network and create synergy with offline stores.

Yanolja, the nation’s # 1 travel and accommodation booking app, is reportedly considering developing the food delivery app as a full service provider to consumers. It is reported that Yanolja is seeking to form a consortium with private equity funds instead of launching an independent bid, an investment banker said.

Private equity firms are also expected to partner with local conglomerates that did not participate in the preliminary tender.

Yogiyo is the second food delivery app in Korea with a 30% market share as of September last year, according to the Nielsen Korea market research. His share is only half of the 59.7% of leading player Baedal Minjok, but more than quadruple of number 3 Coupang Eats with 6.8%. Baedal Minjok and Yogiyo shares reportedly contracted to 53% and 27%, respectively, in February, but they still far outpace rivals.

There is, however, a downside risk for investors. The buyer is also expected to make additional investments for years to come, as ecommerce players are still striving for market share for growth rather than profit.

Yogiyo went on sale after Germany’s Delivery Hero received an order from the Korean antitrust agency in December to dispose of the No.2 player to retain No.1 Baedal Minjok.

Delivery Hero has until August to sell Yogiyo. He can request an extension of up to six months for unavoidable circumstances.

By Jin Young-tae, Kim Hyo-hye, Kang In-seon and Cho Jeehyun

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