POSCO-GS, Hanwha, Hyundai Heavy submit bids for Daewoo Shipbuilding

(ATTN: ADDS details, stock reactions in paras 9-12; EDITS lead para)
SEOUL, Oct. 13 (Yonhap) -- A consortium formed by POSCO Co. and GS Group as well as two other South Korean business conglomerates submitted their final bids Monday for a controlling stake in Daewoo Shipbuilding & Marine Co., the state-run Korea Development Bank said.

KDB, which owns a 31 percent stake in Daewoo Shipbuilding and is managing the
sale, will select a priority negotiator for the world's No. 3 shipyard as early
as Oct. 25 after reviewing the proposals. The two other conglomerates are Hanwha
Group and Hyundai Heavy Industries Co.
Earlier in the day, KDB's chief executive Min Euoo-sung said he wasn't concerned
about the prospects for the sale of Daewoo Shipbuilding.
Prospects for the sale of a 50.4 percent stake in Daewoo Shipbuilding had been
dimming as the shipbuilder's stock price has more than halved since August, when
prospective bidders were invited to send their preliminary bids, as the global
financial crisis and following economic slowdown undermined the company's
shareprice, some analysts say.
"I'm not seriously worried about (that issue), because a price is calculated on
average (stock) prices quoted for at least three months," Min said.
For weeks, officials at KDB have indicated the tender for Daewoo Shipbuilding
would fail if a purchase price is too low.
About three months ago, analysts had expected the controlling stake in Daewoo
Shipbuilding could fetch some US$7 billion, but they expect a price of as low as
$4 billion today.
The transaction, if successful, would be one of the biggest asset sales by South
Korea's state-run financial institutions, which took over many indebted private
companies in the wake of the 1997-98 Asian financial crisis.
Last week, POSCO, the world's fourth-largest steelmaker, formed the consortium
with GS, an energy and retail conglomerate. POSCO's senior officials have said
the acquisition of Daewoo Shipbuilding would give it a competitive edge by
supplying customized ship plates for technologically complex vessels such as
offshore drilling ships or gas plants.
Hyundai Heavy, the world's No. 1 shipbuilder, and Hanwha, an insurance and
financial conglomerate, are looking to buy Daewoo Shipbuilding to expand their
business lineup.
Shares of Daewoo Shipbuilding climbed 9.24 percent to close at 19,500 won,
outperforming the benchmark stock index's 3.79 percent gain. POSCO rose 5.17
percent to 376,500 won and GS jumped 9.25 percent to 24,800 won.
Hyundai Heavy rose 2.03 percent to 201,000 won and Hanwha Chemicals, which
submitted the bid on behalf of its parent group, gained 3.86 percent to 39,000
won.
Foreign investors were banned on security grounds from bidding for Daewoo
Shipbuilding, which makes submarines for the South Korean Navy.