Hyundai Securities deal close to collapse

"We've been at this 15 months already, and we can't force money on people," Ross says. "If they don't want the money, that's fine."

By CNN's Alex Frew McMillan in Hong Kong

SEOUL, South Korea (CNN) -- The U.S. group that is buying three Hyundai financial companies will walk away if it doesn't see progress on the price.

Wilbur Ross, chairman and CEO of W.L. Ross & Co., told CNN on Friday that the team is close to falling apart.

Ross and its partners are buying South Korea's third-largest brokerage, Hyundai Securities, and two other companies.

"We've been at this 15 months already, and we can't force money on people," he said. "If they don't want the money, that's fine, and they can fix the problem themselves."

Deal worth 2 trillion won

W.L. Ross and insurance giant American International Group led the team that agreed last week to buy the three companies.

The total deal is worth $1.6 billion (2 trillion won). The American investors agreed to pay 1.1 trillion won, with the Korean government chipping in 900 billion won.

The investment group would get a 29 percent stake in Hyundai Securities, as well as stakes in and management control of Hyundai Investment Trust & Securities and Hyundai Investment Trust Management Co.

But the deal has snagged as the Korean government, the companies and the U.S. investors haggle over price.

Stock discount a problem

Korean authorities claim they cannot sell Hyundai Securities, which is publicly traded, at too steep a discount. They want 8,940 won per share, while the American investors are offering 7,000 won.

Ross told CNN that the investors and the Korean government have settled all the "issues of consequence." The lone standout is price.

He noted that the price of Hyundai Securities stock has run up from 4,000 won, as the Americans neared a deal. The investors feel their price is fair, if they are to earn a reasonable return on the investment, he said.

Ross stated that the U.S.-led team cannot keep the 1.1 trillion won set aside for the investment for long.

AIG chairman Maurice Greenberg has admitted there may have been some miscommunication on the price of the deal. But the American investors say their stance is now clear.

Hyundai Securities president Hong Wan-soon has said he does not understand why the U.S. investors will not meet the 8,940 won price. Korean regulations prevent stock from being sold at a discount of more than 10 percent.

Hyundai Securities stock has slumped as the deal stalled. It was down 7.3 percent at 7,600 won in early afternoon Friday.

The South Korean government has spent $110 billion helping its banks and companies restructure after the Asian financial crisis. U.S. companies have stepped in, looking to buy stakes in Korean companies at a discount.

Officials said Friday that General Motors had entered a final bid in its drawn-out negotiations to buy bankrupt Daewoo Motors, South Korea's third-largest car company.

The offer reportedly excludes Daewoo's Bupyong plant.