The sale of Eijis Asset Management is increasingly uncertain, with growing unease among sellers as Heungkuk Life Insurance and National Pension Service (NPS) challenge the deal from both sides.
Those close to the sellers argue that the two institutional investors are effectively trying to derail a private M&A transaction—despite understanding that sellers have full discretion over such deals.
However, market observers counter that the sellers failed to properly account for Korea's unique business and capital market dynamics. Critics point to the sellers' reliance on legal technicalities while overlooking regulatory sentiment and public opinion as the root cause of the current impasse.
'Progressive Deal' Dispute
The sellers claim all bidders, including Heungkuk Life, agreed in advance to a "progressive deal" approach—a negotiation method that encourages competition among buyers to gradually raise the sale price.
Heungkuk Life disputes this, alleging that Morgan Stanley, the lead advisor, promised not to use progressive bidding in their case. The insurer says it submitted the highest bid based on this assurance, only for Hillhouse Investment to be named preferred bidder. Heungkuk has filed a police complaint against the advisors.
"Standard M&A process letters clearly outline deal procedures, seller discretion, and the right to conduct additional negotiations," an investment banking source said. "Sellers retain the right to modify, restructure, or halt the process at any time."
Sources say Hillhouse was selected partly because Eijis employees preferred a global private equity buyer and because Hillhouse's substantial capital suggested a swift closing.
"Buyers who might disrupt a transaction are typically excluded from M&A processes," another industry official said. "Price matters, but so do reputation and reliability."
NPS Draws Its Sword
NPS's aggressive stance has added to market confusion. The pension fund is pushing back hard, alleging Eijis disclosed fund beneficiary information during the sale process. NPS has threatened unprecedented measures including replacing the general partner.
Industry insiders speculate that NPS's real estate division had accumulated grievances against Eijis management that erupted with this M&A.
NPS played a crucial role in building Eijis into what it is today, serving as the largest investor in many of the firm's major deals.
"Two years ago, it was discovered that Eijis CEO Cho Gap-joo had set up a family company to acquire stakes in a large development project Eijis was pursuing," an IB source said. "That project was the Magok One Grove building, which NPS had committed to purchase upon completion. NPS was furious when they found out."
The fact that both Eijis's sale plans and Hillhouse's selection as preferred bidder were first reported by media—rather than communicated directly to NPS—further irritated the pension fund, sources say.
"They didn't seek prior consent from NPS, which built the company," a real estate industry official said. "While fund performance deteriorates, major shareholders and management are cashing out big—that's what enraged NPS."
Some market participants say NPS's response has gone too far. "In M&A valuations for asset managers, some fund information inevitably gets shared with potential buyers," an IB official said. "NPS's unusually strong reaction suggests they may be trying to completely upend the deal."
