HSBC drops offer for KEB
Friday 19th September 2008, 10:32AM BST.
HSBC has abandoned its bid for a majority stake in Korea Exchange Bank (KEB), blaming financial market turmoil for the decision.
The bank had made a $6 billion (£3.3 billion) offer for private equity firm Lone Star’s 51.02 per cent of KEB but has now withdrawn the offer.
The terms of the offer were negotiated last year but the financial situation has changed significantly since then, HSBC said.
Despite the decision, the bank emphasised its commitment to growing its business in the region.
Sandy Flockhart, chief executive at HSBC Asia, said: “In the light of developments around the world, not least changes in asset values in world markets, we do not believe that it would be in the best interests of shareholders to continue to pursue this acquisition on the terms negotiated last year.
“HSBC remains fully committed to Korea, however, and it is our aim to play a full part in the country’s financial services sector. Our focus is now on HSBC’s existing and growing operations in Korea which we will continue to invest in and develop.”
There has been speculation that HSBC may use the cash to buy a western bank hit by the credit crunch instead.
HSBC has been named as a potential suitor for Washington Mutual, Morgan Stanley and Royal Bank of Scotland this week.
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