Hana to sell shares for KEB takeover

Hana Financial Group plans to issue shares worth US$1.25 billion in a bid to help finance its takeover of Korea Exchange Bank.
 

South Korea's No. 4 financial services company clinched a deal with U.S. buyout fund Lone Star Funds in November to buy a 51.02 percent stake in KEB, the fifth-largest lender in South Korea, for 4.69 trillion won, or 14,250 won per share.

The group has said it will raise about half of the takeover funds internally, mainly dividends from Hana Bank, the group's flagship banking unit. The remainder will be financed through sales of shares and bonds.

The group said the board approved its plan to sell 34.1 million in common shares to raise funds from 34 domestic and foreign investors, about 25 percent of the money needed to buy KEB.

To help fund the KEB acquisition, the group received a combined divided of 2.2 trillion won from its banking unit and unlisted brokerage affiliate. The group has also sold 1.5 trillion won in bonds.

The group's deal to buy KEB will enable Hana Financial Group to become the country's No. 2 industry player with combined assets worth 316 trillion won. The contract is subject to regulatory approval.