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HSBC 'in Korea bank buy fight'
18.03.08
Private-equity group Lone Star is said to be demanding a higher price from HSBC for its Korea Exchange Bank (KEB).
HSBC has offered $6.43 billion (£3.19 billion) for the bank in a deal that has faced a host of problems including investigations in Seoul.
Lone Star is reportedly demanding an increased bid to reflect the rise in the target's book value, but it is unknown how much more the US group is seeking.
HSBC agreed to buy Lone Star's 51% holding in the bank in August but the deal has dragged on as Korean regulators have delayed a ruling into the ownership of the stake after the fund's country head, Paul Yoo, was found guilty of stock manipulation.
Yoo was accused of driving down the price of shares in a unit of KEB to buy the lender cheaply.
The HSBC offer runs out in April but is likely be extended. Both parties hope South Korea's new President, Lee Myung-bak, who has pledged to improve the business climate, may help end the saga with a quick ruling.
Earlier this month, the deal cleared one hurdle with the country's competition watchdog, the Fair Trade Commission, saying it had no opposition.
