HONG KONG (Reuters) – The CEO of HSBC Holdings said on Tuesday it would not bid for a $4.2 billion controlling stake in Korea Exchange Bank (004940.KS), ending speculation that Europe’s biggest bank would once again take part in the auction.
When asked by Reuters whether HSBC (HSBA.L) (0005.HK) was bidding for U.S. private equity firm Lone Star’s [LS.UL] 51 percent stake in KEB, Geoghegan said: “No, we are not.” Geoghegan was attending an American Chamber of Commerce event at the Four Seasons here.
Geoghegan’s denial is the first public comment on the matter that HSBC has made since Lone Star relaunched the sale of its holdings in KEB.
Some Asia based investment bankers, investors and executives had expected HSBC to make another attempt to buy South Korea’s sixth-biggest bank.
Lone Star bought 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 due to pricing and legal disputes over the U.S. fund’s South Korean activities.
Lone Star’s 51 percent stake in KEB has a current market value of about 4.6 trillion won ($4.17 billion).
Europe’s top bank being out of the running for KEB could potentially ease bidding tension from the sale process that sellers are hoping for.
Last week, sources told Reuters that Australia and New Zealand Banking Group Ltd (ANZ.AX), Australia’s No. 4 bank, was preparing to make a bid for Lone Star’s stake.
ANZ’s CEO, Michael Smith, is HSBC’s former top Asia executive.
Geoghegan also said on Tuesday that HSBC would list in Shanghai when the Chinese government and regulators were ready.
Prior to the news, KEB shares closed down 1.4 percent at 14,000 won on Tuesday, versus a 0.15 percent drop in the wider market .
By Ronnie Koo
(Additional reporting by Rhee So-eui in SEOUL; Editing by Jacqueline Wong and Jonathan Hopfner)