Lone Star Plans To Sell KEB Stake Within 6 Months

BERLIN (Reuters) – Private equity firm Lone Star Funds [LS.UL] expects to sell its majority stake in Korea Exchange Bank (004940.KS) in the next six months, Lone Star managing partner John Grayken said on Wednesday.

Lone Star previously tried to sell the stake but was thwarted.

British bank HSBC (HSBA.L) in 2008 dropped a $6.3 billion offer for the stake, blaming turmoil in financial markets and ending what would have been the biggest cross-border move ever in South Korea’s bank sector.

Last August, KEB Chief Executive Larry Klane said he expected Lone Star to sell its stake “at some point” but declined to speculate on when.

Lone Star bought the stake in 2003 for $1.2 billion.

Grayken, speaking to an audience at the Super Return private equity conference in Berlin, gave no details about potential buyers of the stake.

He gave some historical background about the previous attempt to sell the stake, saying that when Lone Star was ready to monetize its gain, there was “a political backlash against the government and against ourselves because of the amount of money we were going to make.”

“It was more or less a populist movement,” he said, adding, “It’s over.”

He said he expects to sell the stake in the “next six months”. (Reporting by Megan Davies; editing by John Wallace)