HSBC Closer to KEB Takeover
By Yoon Ja-young
Staff Reporter
The Financial Services Commission (FSC) announced Friday that it would resume regulatory review of a deal in which HSBC will take over the Korea Exchange Bank (KEB) from Lone Star Funds. As things stand now, the review is expected to be positive, paving the way for HSBC, the largest bank in Europe, to acquire the Korean bank.
``With the deadline for the deal between HSBC and Lone Star nearing, we concluded that it was necessary to clarify the government's position on the deal,'' the commission said in a statement.
Europe's largest bank had signed with the U.S. buyout fund to take over the its stake in Korea's fifth largest bank for $6.3 billion in September 2007. The financial regulator, however, had been delaying approval of the deal, citing legal uncertainties. The private equity fund is waiting for a Supreme Court ruling over a KEB stock price manipulation case, after Seoul appeals court cleared Lone Star Korea's head of the charges. A ruling on whether the KEB sale was conducted at an allegedly artificially low price is expected in September.
The London-based bank and Lone Star had extended the deadline for the deal to July 31 in April, but there had been no progress. There have been reports that the two are likely to extend the deadline again.
``The government is fully respecting the international and civil deal between HSBC and Lone Star,'' the commission said. It added that it requested HSBC to update data as seven months have passed since the bank first submitted the application for approval. The review will resume as soon as the new data is submitted, according to the commission.
The regulator, however, made it clear that final approval will be made after clearance of the legal uncertainties. It added that the resumption is based on the determination that the government's position shouldn't affect HSBC and Lone Star's extension of the deadline. If the regulator decides to give approval for the deal, it is likely to come after September following the court ruling.