Reports of HSBC’s renewed interest in KEB have given me the impetus to resurrect a post which has been work-in-progress for a while. I’ve been periodically trying to google back in time to reconstruct the whole KEB saga, and yesterday’s FT coverage gave a very useful framework on which to build.
So here is another of my collections of links around a particular story, which I’ll update as and when I come across more. The chronology and narrative is from the FT. The links are mine, many of them via Tom Coyner.
August 2003 Lone Star agrees to pay Won1,400bn ($1.5bn) to take control of ailing Korea Exchange Bank.
- Lone Star to purchase Korean bank today, JoongAng Daily, 27 August 2003
- New player in retail lending, JoongAng Daily, 27 August 2003
- Lone Star to keep KEB leaders, JoongAng Daily, 28 August 2003
January 2005 HSBC eyes KEB after losing out to Standard Chartered’s $3.3bn bid for Korea First Bank.
March 2006 Kookmin Bank agrees to buy a controlling stake in KEB for $6.7bn.
- Industry buzz says Kookmin to woo KEB, JoongAng Daily, 22 March 2006
- It’s official: Kookmin is priority KEB bidder, JoongAng Daily, 22 March 2006: “Kookmin, Korea’s largest bank in assets, submitted a bid totaling 6.4 trillion won ($6.6 billion) to buy a 64.6-percent stake in the bank”
April 2006 Lone Star offers to donate to South Korea Won100bn of the estimated Won4,500bn profit made from its sale of KEB, bowing to pressure to pay taxes on profits made in the country. Questions remain over the sale of KEB to Lone Star.
- In Korea, saying sorry with cash. IHT, 23 April 2006
June 2006 South Korea’s Board of Audit and Inspection (BAI) clears Lone Star of any wrongdoing in its 2003 acquisition of KEB.
November 2006 The former chief executive of KEB is arrested, the first detention in the investigation into the bank’s 2003 sale. Meanwhile, South Korean prosecutors file stock manipulation charges against Lone Star and KEB.
- Ex-KEB Chief Arrested Over Sale to Lone Star, Chosun, 7 Nov 2006
November 2006 Lone Star cancels its agreement to sell KEB to Kookmin Bank
- Lone Star scraps KEB deal, prosecutor calls Financial Times big, fat liars: Robert Koehler, Marmot’s Hole, 24 November 2006
- U.S. buyout firm cancels plans to sell controlling stake in Korea Exchange Bank. IHT, 23 November 2006
December 2006 South Korean prosecutors conclude that the sale of KEB to Lone Star was illegal due to the manipulation of financial data. Lone Star was not directly involved, according to the prosecutor. Lone Star rejects the conclusion, claiming the lender’s capital adequacy ratio was over- rather than understated.
- A regulatory nerd picks apart a Hankyoreh Article, LKL 11 Oct 2006
- Lone Star’s Korean deal “illegal“, BBC, 7 December 2006
- Seoul prosecutors call Lone Star’s 2003 acquisition of bank illegal, Bloomberg / IHT 7 December 2006
March 2007 BAI pushes for the sale of KEB to Lone Star to be nullified.
- State Auditors Conclude Damning Report on KEB Sale, Chosun, 13 March 2007
June 2007 Lone Star reduces its stake in KEB by 11.3 per cent to 51 per cent.
- Lone Star begins cashing out, JoongAng Daily, 23 June 2007
August 2007 HSBC says it is in talks to buy Lone Star’s controlling take in KEB.
- Lone Star confirms HSBC in talks to buy KEB, JoongAng Daily, 22 Auguest 2007
- HSBC bids for majority share in South Korean bank, IHT, 3 September 2007:HSBC has agreed to buy a 51 percent stake in Korea Exchange Bank from the U.S. private equity firm Lone Star for about $6.3 billion in cash as it attempts to increase its profile in South Korea.The deal is subject to governmental and regulatory approvals, and HSBC said the purchase price would increase by $133 million if the deal was completed after Jan. 31, 2008.
- HSBC issues circular to shareholders re proposed KEB acquisition, 21 Sept 2007. Available on HSBC investor relations website. (pdf here)
- South Korea bank sale to HSBC must await court probes: minister – Channel News Asia, 11 October 2007
The big picture:
- Lone Star saga: A cautionary tale in Korea. Bloomberg / IHT, 2 August 2007