British bank HSBC Holdings PLC said yesterday it had canceled an agreement to purchase a controlling stake in a South Korean bank from US private equity group Lone Star Funds amid world financial turmoil.
HSBC said in a statement that it “exercised its right to terminate the acquisition agreement with immediate effect.”
The London-based bank cited “all relevant factors including current asset values in world financial markets” for the decision.
It gave Thursday as the date of the cancelation.
The bank agreed last September to purchase Korea Exchange Bank from Dallas, Texas-based Lone Star, which has faced regulatory and legal obstacles in efforts to sell its 51 percent stake in the local lender it purchased in 2003.
South Korea’s financial regulator, which was reviewing the proposed purchase by HSBC, had recently suggested it was likely to be approved. Global financial turmoil this week, however, appears to have played a major role in scuttling the deal.
“In the light of developments around the world, not least changes in asset values in world markets, we do not believe that it would be in the best interests of shareholders to continue to pursue this acquisition on the terms negotiated last year,” said Sandy Flockhart, chief executive officer of HSBC Asia and an executive director of HSBC.
HSBC had contracted to buy Lone Star’s controlling stake in Korea Exchange Bank, the country’s sixth-largest lender, for about US$6 billion.
The Financial Services Commission, the regulator, expressed disappointment.
“It is regrettable that HSBC unilaterally canceled the contract during the review process despite active efforts by the FSC,” the regulator said in a statement.
Lone Star chair John Grayken confirmed HSBC’s decision.
“We are disappointed that HSBC terminated the agreement and that the transaction will not be completed,” he said in a statement.
Lone Star has battled suspicions that it was able to purchase the bank at a bargain price after allegedly colluding with government officials to understate the bank’s financial health.
The fund has denied any wrongdoing and argued its rehabilitation of the once-financially strapped bank has been good for South Korea’s economy.
Lone Star’s efforts to sell Korea Exchange Bank have also run up against public opinion in South Korea seen as hostile to foreign buyout firms.
In June, a South Korean appeals court overturned a guilty verdict against Lone Star in a stock manipulation case, causing speculation that its fortunes were turning.
HSBC signed the deal with Lone Star after a previous effort to sell the stake to Kookmin Bank, South Korea’s largest bank, collapsed.
KEB CEO Richard Wacker lamented the cancelation in a statement, calling it “a lost opportunity for KEB and Korea.”
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
FIRST TRIAL: Ko’s lawyers sought reduced bail and other concessions, as did other defendants, but the bail judge denied their requests, citing the severity of the sentences Former Taipei mayor Ko Wen-je (柯文哲) was yesterday sentenced to 17 years in prison and had his civil rights suspended for six years over corruption, embezzlement and other charges. Taipei prosecutors in December last year asked the Taipei District Court for a combined 28-year, six-month sentence for the four cases against Ko, who founded the Taiwan People’s Party (TPP). The cases were linked to the Core Pacific City (京華城購物中心) redevelopment project and the mismanagement of political donations. Other defendants convicted on separate charges included Chinese Nationalist Party (KMT) Taipei City Councilor Angela Ying (應曉薇), who was handed a 15-year, six-month sentence; Core Pacific
RSS