SEOUL (AFP) - HSBC, the London-based financial services giant, has offered to buy Korea First Bank for somewhere between three and 3.5 trillion won (2.7-3.2 billion dollars).
The Joongang daily and the Korea Economic Daily on Friday quoted a banking source close to the deal as saying that HSBC had offered to purchase the country's seventh largest bank by taking over stakes held by US-held Newbridge Capital and the state-run Korea Deposit Insurance Corp.
Newbridge owns 48.56 percent of Korea First Bank and Korea Deposit Insurance Corp. owns 48.49 percent.
"HSBC plans to buy the shares that Newbridge holds as well as most of those owned by the Korea Deposit Insurance Corp.," the source was quoted as saying by Joongang.
"The price of the shares will be about 15,000 won (13.5 dollars) to 17,000 won per share, which makes the entire takeover worth about 3 to 3.5 trillion won," he said.
Newbridge Capital said that it had not reached any deal to sell its stake in Korea First Bank but stopped short of denying that there had been talks to discuss such a sale.
"This is a rumor and Newbridge has not reached a deal with anybody," Newbridge said in a brief comment.
HSBC's Seoul office declined to comment on the report.
Korea Deposit Insurance said it had not been informed of the reported acquisition either.
"We have not been notified of any details about this," an official at Korea Deposit Insurance said.
However, he said that Korea Deposit Insurance, along with the finance ministry, which has the remaining 2.95 percent stake in the bank, is required by law to sell its shareholding in Korea First Bank should Newbridge divest its controlling stake.
Under the law, all shares should be sold at the same time and under the same terms when the financial institutions that received public funds to survive the 1997 financial crisis -- including Korea First Bank -- change hands.
11/12/2004 - 13:25 GMT - AFP