Lone Star Puts 11.3% KEB Stake for Sale
By Lee Hyo-sik
Staff Reporter
Lone Star Funds, U.S. private equity fund, has offered to sell an 11.3 percent stake in Korea Exchange Bank (KEB) for up to $1.1 billion, Bloomberg reported Thursday.
The U.S. investment fund is offering 73.09 million KEB shares at between 13,150 won and 13,750 won, the U.S-based business wire service said, citing e-mail sent to fund managers by Credit Suisse Group, the sale's arranger.
Lone Star owns a 64.6 percent stake in KEB worth 6.1 trillion won based on the closing share price of 14,600 won on Thursday's trading session.
It has been trying to sell its KEB stakes over the past year but has not been able to do so because of legal problems associated with its purchase of the shares in late 2003. The prosecution and the Board of Audit and Inspection have accused Lone Star of acquiring the majority stake in the bank at below market price through illicit ways.
The investment fund signed a contract with Kookmin Bank, the country's largest lender, in May last year to sell its entire KEB stake but cancelled it in November because of the prosecution's investigation into the legality of its takeover. Prosecutors called the deal ``illegal,'' and the state auditor also concluded it was illegal for Korean regulators to approve the acquisition.
After the contract with Kookmin was cancelled, Singapore's DBS Group Holdings showed interest in buying KEB, and Lone Star started negotiations. However, Singapore's largest bank said last week that it ended talks with the U.S. investment fund, citing the legal uncertainties surrounding Lone Star's KEB acquisition.