Lone Star Funds may have finally run out of patience with the
long-delayed sale of Korea Exchange Bank. A local Korean newspaper, The Korea Times, is reporting that the US buyout shop is
considering suing the South Korean government if it drags its feet on approving the $6.3 billion sale of KEB to HSBC Holding plc past September.
Continue reading below
The HSBC offer officially lapsed on July 31 as the government delayed
approving the sale of 51% of the bank, citing legal uncertainties, although Lone Star still expects the sale to close. The private equity firm is also mulling other options such as combining a block sale with distributing the shares to
its limited partners, the
Korean newspaper reported.
Lone Star has been trying to sell KEB for over three years but has
faced trouble at every turn due to a backlash regarding the size of the
profits it stands to make on its $1.5 billion investment in KEB. South
Korean prosecutors have waged a two-fronted war against Lone Star
executives and others involved in the Dallas firm's 2003 acquisition of
the bank. The Texas-based buyout shop was forced to scrap a $7.3
billion deal to sell the lender to Kookmin Bank in 2006. And its more
recent deal to sell a controlling stake to HSBC has faced numerous
extensions. - George White
See Reuters story
See feature story on Lone Star/KEB
