BK Consortium Failing To Close On Majority Stake In $333 Million Bithumb Acquisition Deal
BK Consortium’s bid to acquire South Korean exchange Bithumb may have fallen apart according to reports surfacing from the Asian country’s local media.
The exchange may reportedly end up with new owners after the deal to place it in BK’s hands has hit a brick wall.
BK Consortium defaults on payment
In October 2018, BK Consortium agreed to buy Bithumb in a USD 350 million deal which would have given the company a 50% plus one controlling stake in the exchange. Reports from local media outlets in South Korea say that BK only paid USD 100 million of the required amount, with the rest due at an unspecified date. It appears that BK has now missed several deadlines to make the rest of the payment, and this has placed the acquisition deal in jeopardy.
Sources close to the matter say that BTC Holding Company, the original owner of Bithumb, has given BK until some time this week to settle the rest of the transaction. Given that BK has already missed all of the payment deadlines set before this one, it is unlikely that the deal will be closed.
Earlier this year, BK Consortium sought to have the size of its purchase increased from 50% plus one to 76% and have the deadline for payment extended as part of the deal. This request was denied by BTC, which felt that BK’s missed deadlines are a sign that the company may not have the funds to complete any sort of deal.
If BK fails to make the required payment, it could result in a legal battle between themselves and BTC over the $100 million that has already been paid. Representatives of Bithumb say that the issues surrounding the exchange’s sale have not affected its business in any way. Business would go on as usual, even if the acquisition deal is completely taken off the table.
American and Chinese investors lurking
The collapse of the deal between BTC and BK presents an opportunity for other players to come in and lay claim to the exchange.
An insider on the matter, who spoke on condition of anonymity, said that there are several big-name exchange operators from America and China that are keeping tabs on the developments around the acquisition deal. These exchange operators view BK’s failure to close the deal as an opportunity for them to enter the fray.
BK runs many crypto related businesses that are based in Singapore. It is headed by Kim Byung-gun, who is also the head of BK Medical, the country’s biggest chain of plastic surgery clinics. If BK succeeds in completing the deal to acquire Bithumb, it will make them the owners of South Korea’s biggest exchange by trading volumes.