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SK Telecom Submits Conditions for Hanaro Stake

Reuters
Wednesday, 14 Nov 2007 | 12:28 AM ET

Shares in top South Korean mobile operator SK Telecom jumped more than 6 percent on Wednesday after it said it had submitted a set of conditions to buy a major stake in No. 2 broadband provider hanarotelecom.

SK had previously said it was aiming to submit a bid early this week. "We submitted a set of conditions for the hanaro stake yesterday, but no letter of intent," an SK spokesman said.

A consortium led by American International Group and Newbridge Capital is selling a 40 percent stake in the country's second-biggest broadband provider, worth 1 trillion won (US$1.09 billion) at Tuesday's closing price.

SK shares rose 6.7 percent to 255,000 won in the Asian session, compared with the wider market's 2.0 percent rise, as the move is seen extending SK's reach with hanarotelecom's broadband operations.

Shares in hanarotelecom were up 0.5 percent at 10,950 won against the junior Kosdaq market's 1.5 percent rise.

SK emerged as the most likely winner for the stake after a source said last week a bid by Australia's Macquarie Group had failed.

Meanwhile, a source close to the matter told Reuters that Macquarie had offered 10,000 won per share for each of the 91.4 million shares owned by AIG and Newbridge, valuing the stake at 914 billion won.

A local newspaper had earlier said Macquarie, the biggest foreign investment bank in South Korea, had offered about 12,000 won for each share, valuing the stake at $1.2 billion.

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