Shinhan Will Buy Majority Stake in LG Card for $7.19 Billion

Shinhan Financial Group will pay 6.68 trillion won ($7.19 billion) to buy a majority stake in credit card issuer LG Card, setting the same price for shares held by both creditors and minority shareholders, South Korea's No.2 financial services firm said Thursday.

Shinhan said in a filing with the Korea Exchange that it would buy a combined 78.6% stake in the top local card issuer at 67,770 won in a public tender by February or March, although the time table may change.

Earlier this month, Shinhan agreed to buy a majority stake in LG Card for 5.2 trillion won from creditors. That price excluded the value of a 7.1% stake already owned by a Shinhan group unit and a 17.6% stake held by minority shareholders.

Shinhan, 8.8% owned by French bank BNP Paribas, agreed in August to take over an 85.7% stake in LG Card, including the shares Shinhan's banking arm owned.

The deal is expected to be the country's largest takeover after U.S. buyout fund Lone Star terminated the $7.3 billion sale of Korea Exchange Bank to top-ranked Kookmin Bank last month.

With the acquisition, Shinhan is set to become the dominant player in the country's credit card market, into which local banks have been keen to expand to compensate for falling margins from lending.

Shinhan planned to raise about 6.7 trillion won by selling bonds and preferred shares to finance the deal, its CEO said in late August.