HSBC to be picked for KFB deal
(China Daily)
Updated: 2004-12-24 10:56

SEOUL: HSBC Holdings is expected to be named the preferred bidder to buy South Korea's eighth-largest lender Korea First Bank, a source at the Korean bank familiar with the deal said yesterday.

HSBC, the world's second-biggest bank by market value, has been vying for Korea First Bank in order to get a foothold in Asia's third-largest economy, where the consumer debt market is recovering from a soured credit boom.

The successful bidder for a 48.6 per cent stake in the Korean bank, held by US equity fund Newbridge Capital, is also expected to buy another 48.5 per cent stake owned by Korea Deposit Insurance Corp (KDIC), a state agency. Local media have estimated the combined deal is worth up to US$3.3 billion.

"Our bank is preparing to announce the preferred bidder tomorrow morning via a filing to the stock exchange," said the source, who declined to be identified. "HSBC is almost certain to be the preferred bidder."

Newbridge Capital Korea's managing director, Byung Moo Park, declined to comment on the deal or the announcement plan.

Spokesmen at HSBC's London headquarters and Seoul office had no comment either.

On Tuesday, the Maeil Business Newspaper reported HSBC has offered to pay US$2.5 billion for the combined stake, which HSBC declined to confirm.

Korea First Bank said last month its largest shareholder, Newbridge, was in preliminary talks on selling the stake with potential buyers including HSBC. It was later disclosed that Standard Chartered was also in the race.