South Korea's Hana Financial Group, which has said it wants to take a controlling stake in Korea Exchange Bank, said yesterday it had bought shares of the bank in a block sale by Lone Star Funds on Thursday night.
J.H. Jeong, a spokesman for Hana Financial, confirmed the purchase but didn't say how many shares the company bought.
US private equity company Lone Star sold a 13.6 percent stake in the bank for 13,600 Korean won (US$14.68) a share in overnight block sales, a person familiar with the situation told Dow Jones Newswires yesterday. The sale raised 1.19 trillion won for Lone Star, the person said.
Lone Star's sale price was a 6.8 percent discount to the Exchange Bank's closing share price of 14,600 won on Thursday.
The sale leaves Lone Star with 51.02 percent of Exchange Bank, which could allow Lone Star to sell the remaining shares at a premium to any buyer wanting to gain control of the bank.
Pending legal cases surrounding Lone Star's purchase of Exchange Bank in 2003 have deterred buyers up to now.
A Seoul court is investigating allegations that Lone Star helped in underestimating Exchange Bank's financial strength to ease its purchase of the bank. Lone Star is also alleged to have manipulated the credit card unit of Exchange Bank so the bank could takeover the unit at a lower price.
Lone Star has denied any wrongdoing.
The block sale more than repays Lone Star its purchase costs of US$1.2 billion in 2003. It has also received 419.2 billion won.
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