Hana ‘Concerned’ KEB Takeover May Collapse

By Park Sae-jin Posted : May 13, 2011, 09:41 Updated : May 13, 2011, 09:41
Hana Financial Group Inc. is “concerned” its proposed takeover of Korea Exchange Bank from Lone Star Funds may collapse, Chairman Kim Seung Yu said after regulators today postponed a decision on approving the deal, Bloomberg news reported.

According to the report, the delay by the Financial Services Commission’s is “regrettable” and the company will hold a board meeting tomorrow to discuss its plans, Kim said in a telephone interview in Seoul today.

The transaction’s failure would hobble Hana’s bid to become Korea’s third-largest financial services provider by assets and narrow the gap with KB Financial Group Inc. and Woori Finance Holdings Co. The regulator got “divided opinions” from lawyers on whether Dallas-based Lone Star is Korea Exchange Bank’s legitimate owner, FSC Vice Chairman Shin Je Yoon said, the news added.

Both Hana and Lone Star have the option to abandon the 4.7 trillion won ($4.3 billion) deal if it isn’t completed by May 24, the Korean company said in March.


The Supreme Court in March overturned a 2008 ruling that cleared buyout firm Lone Star and its former local chief Paul Yoo of stock price-manipulation charges. The court on March 10 asked the Seoul High Court to reconsider whether Yoo, Korea Exchange Bank and Lone Star’s local unit broke trading rules or evaded taxes.

“This is the worst-case scenario for Hana,” said Kim In, an analyst at Eugene Investment & Securities Co. “Hana shares have been rallying, backed by the planned acquisition since November. Now they’ll be hit hard.”




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