HSBC 'will allow takeover target to keep branding'

22 July 2008

HSBC appears to have made significant concessions in its bid to buy a 51 per cent stake in a South Korean lending bank.

The global firm has told the Asian nation's financial regulator that takeover target Korea Exchange Bank - currently owned by Lone Star Funds - will keep its former branding and employees, as well as its listing on the Seoul stock exchange.

A majority of the bank's board members will also be Korean, HSBC affirmed.

It is understood that HSBC struck the branding agreement due to the fact that the regulator's deadline for the deal to go through falls on July 31st - in just 11 days.

The chief executive of Korea Exchange Bank has already publicly urged the watchdog to approve the deal.

Commenting, Seoul-based fund manager Mo Jae Sung told Bloomberg that the move contradicted previous reports that the bank was willing to walk away from the deal.

"It shows HSBC is not ready to give up on Korea Exchange Bank just yet, unlike wide speculation that it may scrap the deal," he said.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development