Regulators to address Hana's KEB offer after Lone Star court ruling
South Korean regulators will review whether Hana Financial may purchase Korea Exchange Bank (KEB) from Lone Star following a court ruling addressing allegations that the embattled US buyout manipulated KEB’s stock price in 2003 to gain a higher valuation for its exit.
A final ruling is expected on October 6. If Lone Star is found guilty it will be ruled unfit to be KEB's majority shareholder, and may be forced to sell down its stake to 10% or less.
Lone Star currently owns 51% of KEB, which Hana Financial Group offered to purchase for $4.1 billion. That sale process, which began November of last year, has been repeatedly stalled as regulators seek to resolve the issue at hand.
"(We) will review the case after the court ruling," Head of the Financial Services Commission Kim Seok-dong reportedly said of Hana's deal.
Lone Star first announced its intention to exit KEB in 2006 to domestic player Kookmin Bank for $7 billion. Regulators rejected that transaction, leading Lone Star to relaunch the action process in early 2010. Since then, players such as MBK Partners and the Australia and New Zealand Banking Group (ANZ) have also talked to Lone Star about acquiring the asset, but regulations and financing hurdles have resulted in Hana Bank being the last-standing bidder.
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