SK Telecom, South Korea’s largest mobile operator, has lodged a bid to buy a 20 percent controlling stake in Hynix Semiconductor, reports Bloomberg.

According to the report, the operator was the only party to submit a bid for the stake ahead of a 5pm deadline yesterday set by Hynix’s main shareholders – led by the Korea Exchange Bank – which have been attempting to offload the stake for some years.

Hynix had a market capitalisation of KRW12.7 trillion (US$11.3 billion) based on yesterday’s closing price, valuing the 20 percent stake at more than KRW2.6 trillion (US$2.3 billion). A transaction of this size would be the largest share sale for a South Korean technology company since 1999, according to data compiled by Bloomberg.

But with chip prices at a record low, SK’s move into the semiconductor space has been met with a lukewarm response in the markets.
"I struggle to see any logical reason why there are synergies between SK Telecom and Hynix," Shaun Cochran, head of Korea research at CLSA, told Bloomberg. "It’s clear from the unusual timing and nature of this decision that it’s not being driven from shareholders’ perspective."

However, Kim Hong Sik, a Seoul-based analyst at NH Investment & Securities, said the bid makes sense for SK as it tries to diversify as growth slows in the telecoms business. “For a meaningful reorganisation of business, they probably need something as big as Hynix," Kim said. "Hynix isn’t having massive losses like before, and they’re generating cash rather stably now."

Hynix was bailed out by creditors (including Korea Exchange Bank and Woori Bank) in 2001, but has since staged something of a recovery; the firm posted record sales and profit in 2010, helped by cost cuts and demand for chips used in mobile devices, leading the company to pay a cash dividend to investors for the first time.