Shinsegae and Lotte backs out from Yogiyo takeover

This leaves private equity funds competing for the food delivery app.

Shinsegae Group and Lotte Group have backed out from the race to take over South Korea’s food delivery app, Yogiyo, Yonhap reported based on industry sources. The two retail giants had been considered the two most viable potential bidders for Yogiyo.

"After considering the potential synergy effect in combining the retail and the delivery platforms, we decided not to participate in the [Yogiyo] bidding," an official of Shinsegae said.

Last week, Shinsegae's retail unit E-Mart signed a $3.05b (KRW3.4t) deal with eBay to acquire an 80% stake in the latter's Korean operations, beating Lotte.

Lotte Group was speculated to be a powerful candidate for the Yogiyo deal after it lost the eBay Korea deal to Shinsegae, but Lotte was "not interested in acquiring Yogiyo in the first place," according to an official of Lotte Group.

As conglomerates dropped out from the deal, the race to take over the second-largest delivery app narrowed down to private equity funds, including MBK Partners, Affinity Equity Partners, Permira and Bain Capital.

However, industry observers expected that DH may close the deal and attempt to sell Yogiyo at a higher price.