Hyundai Heavy shares dip on possible takeover bid for Hynix

SEOUL, July 5 (Yonhap) -- Shares of Hyundai Heavy Industries Co., the world's top shipbuilder, sank Tuesday on news reports about its possible bid for a stake in Hynix Semiconductor Inc., but the world's No. 2 computer memory chipmaker got a big boost.
Hyundai Heavy closed at 455,000 won (US$426) on the Seoul bourse, down 1.3 percent, after falling as low as 441,000 at one point. Hynix ended at 28,000 won, up 3.9 percent, gaining for a third day.
Earlier in the day, a local newspaper reported that Hyundai Heavy had decided to submit a initial bid proposal for the chipmaker, which Hyundai Heavy denied.
There has been growing speculation that the shipbuilder, awash with cash, is determined to take over Hynix as other local groups such as LG and SK are not showing interest in the chipmaker.
"Hyundai Heavy's takeover will help Hynix make bold and speedy investment and management decisions," said Byun Han-joon, an analyst at KB Securities. "But concerns over the possible takeover of Hynix still linger among investors because the chipmaking sector is so vulnerable to economic cycles and requires massive investments."
Creditors of Hynix Semiconductor, led by Korea Exchange Bank (KEB), are seeking to sell a combined 15 percent stake in the chipmaker with the aim of selecting a preferred bidder in August and wrapping up the sale by the end of the year.
The creditors earlier said they will accept preliminary bids by Friday.
The creditors' previous attempt to sell Hynix Semiconductor hit a snag as volatile business conditions for the chipmaking sector and huge investments have made potential investors wary of buying the company.
KEB is the biggest shareholder in Hynix with a 3.42 percent stake, followed by Woori Bank with 3.34 percent and state policy lender Korea Finance Corp. with 2.58 percent.
The creditors injected $4.6 billion to rescue the chipmaker by swapping their debt holdings into shares in 2001 and 2002.
In the first quarter, the company's earnings tumbled 66.2 percent on-year as weak PC demand battered chip prices.
sam@yna.co.kr