SEOUL, South Korea–A consortium led by Hyundai Motor Co offered more than US$10 billion for land in Seoul's tony Gangnam district where it will build a new headquarters. The sky high price surprised shareholders who sent the automaker's shares down nearly ten per cent.
The land's current owner, Korea Electric Power Corp, said Thursday the consortium of Hyundai Motor, its affiliate Kia Motors Corp. and auto parts maker Hyundai Mobis Co. outbid Samsung Electronics Co in an auction for the 79,342 square metre (854,030 square foot) plot in the high-priced area.
The land was valued at 3.3 trillion won by two private appraisers, according to Kepco. Hyundai defended the 10.55 trillion won (US$10.1 billion) purchase as a step that would burnish its brand and allow better control of its business empire by grouping top managers of all its 30 affiliate companies in one location.
Hyundai Motor "appears to see the move not as an investment but as building its own home," said Park Won-gap, a director of real estate at Kookmin Bank. "That's why its bidding price was higher than expected. It will probably infuriate shareholders."Hyundai's share price dived nine per cent. Kia and Hyundai Mobis both fell eight per cent.
AP