ANZ considers buying $4.0 billion KEB stake
Thursday, 22 April 2010
SEOUL/MELBOURNE, Apr 21 (Reuters): Australia and New Zealand Banking Group is preparing to make a bid for Lone Star's $4 billion controlling stake in Korea Exchange Bank, two sources said, as Australia's No 4 lender looks for major deals in its bid to expand.
ANZ is an unexpected contender for South Korea's sixth-biggest lender, which US private equity fund Lone Star bought in 2003 and is seeking to sell after years of delays due to legal debates.
With its sound balance sheet and ambition to grow, ANZ could make a strong bidder for KEB, in what would be South Korea's biggest banking deal to date, and one which would give a foreign buyer a sizeable foothold in Asia's No.4 economy.
"It's the cheapest market for banking still in Asia," said RBS analyst John Buonaccorsi.
"Multiples across the market in Korea are quite low, certainly compared to most of the Southeast Asian markets which have recovered quite strongly in the last 12 or 18 months. That's probably the attraction, and of course the fact that this stake is ... from a reasonably willing seller."
South Korea's banking industry is facing a major landscape change this year with the KEB's sale and the upcoming privatisation of state-owned Woori Finance Holdings, the country's No 3 banking group.
Shares in KEB rose more than 3 per cent at one point following the news, as investors have been waiting to see response from potential buyers for the bank. The stock was up 2.2 per cent by 0314 GMT, leading the Seoul market's 1.2 per cent gain.
Lone Star's 51 per cent stake in the bank was worth around 4.54 trillion won ($4.06 billion) as of Tuesday's closing.
ANZ declined to comment a possible KEB deal but a spokesman said the bank always looks at acquisitions. Lone Star and Korea Exchange Bank declined to comment.
ANZ is an unexpected contender for South Korea's sixth-biggest lender, which US private equity fund Lone Star bought in 2003 and is seeking to sell after years of delays due to legal debates.
With its sound balance sheet and ambition to grow, ANZ could make a strong bidder for KEB, in what would be South Korea's biggest banking deal to date, and one which would give a foreign buyer a sizeable foothold in Asia's No.4 economy.
"It's the cheapest market for banking still in Asia," said RBS analyst John Buonaccorsi.
"Multiples across the market in Korea are quite low, certainly compared to most of the Southeast Asian markets which have recovered quite strongly in the last 12 or 18 months. That's probably the attraction, and of course the fact that this stake is ... from a reasonably willing seller."
South Korea's banking industry is facing a major landscape change this year with the KEB's sale and the upcoming privatisation of state-owned Woori Finance Holdings, the country's No 3 banking group.
Shares in KEB rose more than 3 per cent at one point following the news, as investors have been waiting to see response from potential buyers for the bank. The stock was up 2.2 per cent by 0314 GMT, leading the Seoul market's 1.2 per cent gain.
Lone Star's 51 per cent stake in the bank was worth around 4.54 trillion won ($4.06 billion) as of Tuesday's closing.
ANZ declined to comment a possible KEB deal but a spokesman said the bank always looks at acquisitions. Lone Star and Korea Exchange Bank declined to comment.