Outgunned in the bidding war for a leading South Korean bank, HSBC may be preparing to line up an even bigger target for acquisition, Korea Exchange Bank.
The global banking giant dropped out of the bidding for Korea First Bank when London-based rival Standard Chartered offered to pay 30 percent more for South Korea’s seventh largest lender.
The deal, worth 3.3 billion dollars, put Standard Chartered in competition with giant US rival, Citigroup, in the world’s 11th largest economy.
“Time is not on HSBC’s side. It cannot delay a strategic decision for a long time if it wants to vie with its rivals in South Korea,” said Jae J. Lee of Dongwon Securities Co.
“In light of its already-made investment in South Korea, it is highly likely that it will jump into the bidding war to acquire Korea Exchange Bank,” he said of the country’s fifth largest bank to be put up for sale after November.
With eight branches in South Korea, HSBC has already invested about one billion dollars here.
Jason Yu of Samsung Securities said HSBC would want a local bank entirely owned by itself.
Korea Exchange Bank would be the only option to meet this requirement after KorAm Bank went to Citigroup in February 2004.
Citigroup completed its acquisition in April after paying 15,000 won (14 dollars) per common share, pushing the total purchase price for its stake of about 97 percent to 2.6 billion dollars.
For this complete story, please visit HSBC Eyes Bigger Fish after Korea First Bank Setback.
