Hana's $900M bid wins nod for SeoulBank

Staff and wires

SEOUL, South Korea -- South Korea has chosen Hana Bank to take over SeoulBank in a $900 million deal that would vault Hana from No. 6 to No. 3 among the country's biggest lenders.

The decision, made Monday by the Public Fund Oversight Committee, means U.S. investment fund Lone Star has missed out on a stake.

If the sale proceeds it will be South Korea's biggest bank privatization since 1999, when the government sold a 51 percent stake in Korea First Bank to another U.S. investment fund, Newbridge Capital, for $420 million.

On the Korea Stock Exchange, Hana shares put on 1.12 percent to close at 18,050 won Monday. The broader market, measured by the Kospi, closed down just 0.1 percent at 717.58.

Financial Supervisory Commission vice chairman Yoo I-chang told reporters of the decision, which came after years of protracted negotiations with potential buyers of SeoulBank. (Full Story)

Others walked away

HSBC and Deutsche Bank were among those who looked and walked away from SeoulBank, which was taken over by the South Korean government after the Asian financial crisis in 1997-98.

The government's avowed aim is to sell SeoulBank by the end of August.

If the deal proceeds, Hana will rank No. 3 among South Korean lenders, behind Kookmin Bank and state-run Woori Finance Holding Co.

The committee's decision, delayed from last week, was complicated by revised bids submitted by each side, Reuters news agency reported.

Guaranteed 1.1 trillion won

Hana had guaranteed the government would receive 1.1 trillion won ($933 million) from its offer of Hana shares as part of its bid to buy nationalized SeoulBank, the chairman of the committee said.

"Hana guaranteed the value of 1.1 trillion won," Kang Keum-shik, chairman of the Public Fund Oversight Committee, told reporters. "Details on the method will be discussed later."

Lone Star had made a cash offer reported to be worth 1.05 trillion won, while Hana offered shares in itself.

Reuters contributed to this report.