Update: Lone Star may sell KEB for 11% less
Lone Star is reportedly looking to sell its stake in Korea Exchange Bank (KEB) to Hana Financial Group at an 11% discount to its previously discussed price of KRW4.4 trillion ($3.8 billion). That price is a further reduction on the 7% discount reported earlier this week.
The news signifies that the drawn-out sales saga may be coming to an end. Earlier this week, domestic media reported that the parties may decide to cut the price of KEB's shares by approximately KRW1,000 apiece - or about 7% - by next week, from KRW13,390. By Thursday, talks had moved to increase that discount to about KRW1,4900 per share, translating to a price of KRW3.9 trillion.
Sources told Reuters that the board decide whether to approve the deal on Friday.
Hana first offered to buy Lone Star's full 51% stake for $4.4 billion in November 2010, but regulators withheld their blessing for the deal until they could resolve legal issues related to charges that Lone Star manipulated KEB's stock price around the time of its 2003 purchase of the group.
After being found guilty of these charges last month, the US buyout firm was ordered to sell down its stake to less than 10% within six months. Hana has remained the top contender for the stake, and has recently been renegotiating a buyout price that factors in ongoing environmental changes. In all, the year-long waiting process and media hype related to Lone Star's court troubles - as well as a worsening economy - has prompted KEB's share price to drop, and in July, the two sides agreed to cut the price tag by about $260 million from its original $4.4 billion.
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