HONG KONG/SYDNEY (Reuters) – Australia and New Zealand Banking Group Ltd (ANZ.AX) has hired Goldman Sachs JBWere and JP Morgan (JPM.N) to advise on its bid for a majority stake in Korea Exchange Bank (004940.KS), sources said on Wednesday, in what is expected to be a more than $4 billion deal.
Sources told Reuters last month that ANZ, Australia’s No.4 lender, was preparing to bid for the KEB stake, currently owned by U.S. private equity firm Lone Star Funds. The auction, also expected to attract large South Korean banks, is the largest banking deal to date in South Korea.
ANZ, JP Morgan and Goldman Sachs (GS.N) declined to comment. Goldman Sachs JBWere is Goldman’s joint venture partner in Australia. The sources declined to be identified as the news of the mandate is not public yet.
ANZ’s hiring of two big bulge Wall Street investment banks for the deal underscores the seriousness with which it wants to pursue the transaction.
The first round bids are due in mid May. Foreign bank interest in the sale is seen as limited, with HSBC Holdings (HSBA.L) (0005.HK) already deciding to stay out of the process.
Top South Korean lender KB Financial had been considered one of the strongest candidates to buy KEB, but banking sources said the group was now considering a deal with Woori Finance Holdings (053000.KS) instead as the government planned to privatise state-owned Woori.
Smaller rival Hana Financial Group (086790.KS) was also interested in KEB but did not have enough cash in hand, analysts said.
Lone Star bought into KEB for $1.2 billion and sold down part of its stake in 2007. Its previous attempts to sell KEB — to Kookmin Bank for $7.3 billion in 2006 and HSBC for $6.3 billion in 2008 — failed as a result of pricing and legal disputes over the U.S. fund’s South Korean activities. Most of legal issues have since been resolved in court.
Credit Suisse (CSGN.VX) is advising Lone Star.