HSBC Ponders Pullout From Korea Bank Takeover
HSBC, Europe's biggest bank, might consider pulling out of a $6.3 billion deal to take over South Korea's No. 6 bank, Korea Exchange Bank, its Asia chief said on Wednesday.
The London bank had extended the deadline in April on its offer to buy a majority stake in the Korean bank from U.S. investment fund Lone Star by three months to the end of July, in a major test of South Korea's openness to foreign investors.
"It's an acquisition we would like to complete, but it's up to regulatory approval," Sandy Flockhart, chief executive for HSBC Asia Pacific, told foreign media in Taipei on Wednesday.
"If nothing happens, we'll find ourselves in a position to pull out. The board will have to consider that position."
KEB spokesperson Nahm-Yon Lee told CNBC that "Korea Exchange Bank still firmly believes that the HSBC deal will be the best choice for future of KEB." Lone Star's representatives in Seoul declined to comment.
Shares of Korea Exchange Bank fell as much as 3 percent against the broader market's 0.5 percent advance. HSBC's London stock closed 2.4 percent lower on Wednesday.
The newly installed government under Korean President Lee Myung-bak has said that it saw the deal as a litmus test of its pledge to open up Asia's fourth-largest economy far wider to foreign investors.