Lone Star wins approval for KEB sale

South Korea's financial regulators gave the deal the go-ahead on Friday, almost two months after Hana officially agreed to acquire the shareholding for KRW3.92 trillion ($3.5 billion), or KRW1,4900 per share - a 46% premium to KEB's last close. It was confirmed that the acquisition will not violate antitrust rules, paving the way for one of Korea's largest ever banking deals.

The Financial Services Commission (FSC) ruling comes amid complaints from KEB's labor union, which fears the bank will be restructured post-sale.

Hana first offered to buy the 51% stake for $4.2 billion in November 2010, but regulators withheld their approval for the deal until they could resolve whether Lone Star had manipulated KEB's stock price ahead of purchasing the company earlier in the decade. The court eventually ruled this to be true.

The media hype related to Lone Star's court troubles - as well as a worsening economy - prompted KEB's share price to drop and Hana launched negotiations about lowering the purchase price. In July 2011, the two sides agreed to cut the price tag by about $260 million. Last November, media reported that the parties were again considering cutting the price of KEB's shares, this time by approximately KRW1,000 apiece - or about 7%, from KRW13,390 - to facilitate the deal's close. Talks then moved to increase that discount to about 11%, to KRW1,4900 per share.

Lone Star purchased KEB for $1.2 billion in 2003 and divested part of its stake in 2007. It had previously tried to sell the bank to Kookmin Bank for $7.3 billion in 2006 and to HSBC for $6.3 billion in 2008.

In December, meanwhile, Export-Import Bank of Korea said it was looking to sell its 6.25% stake in KEB.

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• Topics
• North Asia
• Exits
• Financials
• Trade sale
• Financial Services
• Hana Financial
• Lone Star Funds
• South Korea
• Exit