FSC said Lone Star should reduce its 51.02% KEB stake to below 10% by mid-May.
The financial authorities ordered Lone Star Funds to sell its majority stake in Korea Exchange Bank (KEB) within the next sixth months, Friday.
This will pave the way for Hana Financial Group to take over its domestic rival in the one of the biggest merger and acquisition (M&A) deals executed in the Korean financial industry. The Texas-based buyout fund, which had been struggling to sell its majority stake in KEB and punch a ticket out of Korea for years, couldn’t be happier to be kicked out.
After a much-anticipated meeting, the nine-member executive panel of the Financial Services Commission (FSC) said Lone Star should reduce its 51.02 percent stake in KEB to below 10 percent by mid-May.
While it has been widely expected that the financial regulator would issue a sales order, there have been debate on whether they should allow Lone Star to sell its stake unconditionally or impose punitive terms.
Refusing to attach any penalty to the sales order, the FSC resisted pressure from politicians and KEB unionists, who have been arguing that the regulator should order Lone Star to dispose of its stake in the stock market and prevent it from earning a premium on its holdings.
``We decided to order Lone Star to sell a 41.02 percent stake in KEB in six months. We reached this conclusion, based on legal consultations and precedents,’’ said FSC Commissioner Lee Suk-jun.
View the full story in Korea Times.
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