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Lone Star may sell KEB for 7% less - report

  • Anita Davis
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Lone Star is reportedly nearing the sale of Korea Exchange Bank (KEB) to Hana Financial Group at a 7% discount to the KRW4.4 trillion ($3.8 billion) offer price. If agreed, the move would highlight the pressure that embattled Lone Star faces to offload its asset.

Citing Korea's Maeil Business Newspaper, Reuters reported that the parties may decide to cut the price of KEB's shares by approximately KRW1,000 apiece by next week, from KRW13,390.

Hana 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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