Kumho opens sales negotiations after JP Morgan/Carlyle deal hits snag
Kumho Industrial Co., parent company of Kumho Tire U.S.A. Inc., is now talking with other potential buyers regarding the sale of its tire division in addition to the investment group led by JP Morgan Chase and the Carlyle Group, with whom it has been negotiating this past year.
Negotiations between the Korean company and the Morgan/Carlyle cosortium "have been pretty tough," a Kumho source has told mtdealer.com.
"Price is a major issue."
Kumho is asking $1.5 billion for 80% of the company. "They don't want to pay what we want."
The memorandum of understanding Kumho had signed with the group ended last month, which has opened the tiremaker to negotiations with other potential buyers, who have not been named.
Kumho had originally expected the deal to be finalized by late-September.
The transaction was described as a "money infusion" and company officials said it would have no impact on Kumho's North American tire dealers.
The proposed Morgan/Carlysle agreement also included a buy-back option that reportedly could be exercised within three to five years of the date of sale.
Another provision was that current Kumho management would be kept.