29th Apr 2008 09:23
HSBC Holdings PLC29 April 2008 HSBC EXTENDS TIMETABLE FOR KOREA ACQUISITION HSBC and Lone Star have agreed to extend, until 31 July 2008, the deadline forcompletion of HSBC's proposed acquisition of 51.02 per cent of Korea ExchangeBank ('KEB'), the sixth largest bank in Korea, subject to regulatory approval. On 3 September 2007, HSBC Holdings plc announced that its indirect, wholly-ownedsubsidiary, HSBC Asia Pacific Holdings (UK) Limited ('HSBC Asia') had enteredinto a conditional agreement to acquire 51.02 per cent of the issued sharecapital of KEB from LSF-KEB Holdings SCA ('Lone Star'). The parties have now agreed to extend the deadline for completion of thistransaction (the 'long-stop date') from 30 April to 31 July 2008. Both partieshave also agreed that if approval from Korea's Financial Services Commission('FSC') is obtained during the duration of this agreement, then the long-stopdate deadline for completing the acquisition will be extended by two monthsafter the date of FSC approval. The acquisition agreement already provides thateither HSBC Asia or Lone Star may terminate the acquisition agreement ifcompletion has not occurred on or before the long-stop date (which has beenamended as referred to above). HSBC Asia and Lone Star have agreed further thateither of them may terminate the acquisition agreement by giving notice between1-7 July 2008 inclusive, but no such notice may be given if FSC approval hasalready been obtained. Stephen Green, Group Chairman, HSBC Holdings plc, said: "This is a particularlyexciting time for Korea, Asia's third largest economy, especially given thegovernment's stated desire to create a truly global market, building on itsalready strong economic links to China, Japan, the EU and the US. "The proposed transaction is entirely in line with our stated strategy to focuson high growth economies and I continue to be of the view that it is in the bestinterest of all KEB stakeholders and of HSBC." The purchase price remains as per the original agreement. Accordingly, adjustingfor a dividend of KRW700 per share declared and paid in respect of KEB's 2007annual results, the purchase price is KRW3,170 billion plus US$2,833 million,amounting in total to the equivalent (at the exchange rate on Friday 25 April,2008 of US$1.00 = KRW995.28) of approximately US$6,018 million, payable in cash.In the event that any further dividend is paid by reference to a record dateprior to completion of the acquisition, the purchase price will be furtherreduced accordingly. Under a shareholders' agreement with Lone Star, The Export-Import Bank of Korea('KEXIM') is entitled to require HSBC Asia to purchase, on substantially thesame terms, part or all of its shareholding in KEB. KEXIM's entire shareholdingrepresents a further 6.25 per cent of the issued share capital of KEB. As originally announced, HSBC Asia does not intend to make a tender offer toKEB's remaining shareholders and, following completion of the acquisition, KEBwill remain a company listed on the Korea Exchange. Sandy Flockhart, Chief Executive of The Hongkong and Shanghai BankingCorporation Limited, said: "HSBC has a long history in Korea and thistransaction will reinforce our position both in the country and as Asia's numberone international bank. HSBC intends to make a full contribution to the furtherdevelopment of the financial services industry in Korea and we remain optimisticthat we can complete this transaction as soon as possible." Save for the amendments referred to in this announcement, no other materialchanges to the acquisition agreement have been agreed between HSBC Asia and LoneStar. Notes to editors: 1. HSBC in KoreaHSBC has had a continuous presence in Korea for over 110 years. It first enteredthe Korean market in 1897 in Jemulpo (Incheon), and returned in 1982 by openinga branch in Busan. Today, HSBC has 11 branches and five commercial bankingcentres, employing over 1,350 people. HSBC is one of the largest investorsamongst foreign banks in Korea. Total assets of HSBC Korea are KRW17,904 billionas of 31 December 2007. 2. HSBC Holdings plcThe HSBC Group is one of the largest banking and financial servicesorganisations in the world. The Group had around 10,000 offices in 83 countriesand territories in Europe, the Asia-Pacific region, the Americas, the MiddleEast and Africa, serves over 128 million customers and has assets of US$2,354billion as of 31 December 2007. With listings on the London, Hong Kong, NewYork, Paris and Bermuda stock exchanges, shares in HSBC are held by about200,000 shareholders in over 100 countries and territories. The shares aretraded on the New York Stock Exchange in the form of American Depositary Shares. 3. Lone StarLSF-KEB Holdings SCA is a Belgian incorporated holding company which holds329,042,672 shares in KEB. It is controlled by the general partner of Lone StarFund IV (US) LP, and its ultimate investors include the investors in Lone StarFund IV (US) LP and other institutional investors. Lone Star Funds is a familyof private investment limited partnerships established to facilitate investmentby a group of investors into financial and other assets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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