HSBC 'will cut price' in Korea takeover

4 August 2008

HSBC will scale back its takeover bid for the Korea Exchange Bank (KEB) due to the poor performance of Asian financial stocks recently, Bloomberg reports.

In September 2007, the bank announced that it was willing to pay $6 billion in order to buy the 51 per cent stake in the Asian firm currently held by private equity group Lone Star Funds.

However, financials on the continent have dropped by 18 per cent over this period, meaning that HSBC now wishes to renegotiate its bid.

A further complicating factor in the deal is the deadline for its closure, which passed on July 31st.

"We don't lose anything by being patient to get the deal done," commented a spokesman for the bank yesterday, explaining that negotiations are still ongoing despite the breached deadline.

Speaking to the news agency, CJ Investment & Securities analyst Shim Kyu Sun added: "It would be natural for HSBC to try to renegotiate the price given the market conditions.

"As much as HSBC is determined to buy KEB, it's also true that the current price is too high."

HSBC, based in London, is Europe's largest bank.

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