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The
competition to take over Korea
Investment & Securities Co. and Daehan Investment & Securities is
heating up with four bidders stepping up their efforts to acquire controlling
stakes in the countries two largest trust operators. In April, the Public Fund
Management Committee named a total of seven domestic and overseas parties to
bid for the state-owned financial institutions.
Of the seven Kookmin Bank-JP Morgan Chase
& Co. consortium, Hana Bank which bid jointly with Goldman Sachs Group
Inc., Dongwon Financial Holding Co. and Britain¡¯s Prudential Plc. have expressed the great interest in the
takeovers. The remaining three – Woori Finance Holdings Co.,
American International Group Inc. and Carlyle Group are also carrying out due
diligence studies on the assets managers but have been less aggressive, according
to a sources. Woori Finance Holdings will likely give up the bid for the two
companies if it succeeds in taking over LG Investment & Securities Co., which
LG Group plans to sell in order to pay creditors of its ailing credit-card
unit.
The Finance Ministry hopes to auction off
the two state-owned companies, nationalized after the 1997/98 Asian currency
crisis with the injection of huge sum of public fund to make the companies stay
buoyant, within the second half of 2004.
The government plans to select priority
negotiators by late June or early July before determining detailed terms and
conditions for the takeover. Industry sources predicts that local institutions are likely to be
selected as preferred bidders given their strong interest in the takeovers. Hence,
Kookmin and Hana seem to be the most likely candidates as they are in collaboration
with foreign financial institutions.
Worries about growing influence in the local financial
sector have deepened here after a wave of acquisitions by overseas investors. Major
institutions that have fallen into foreign hands since last year include Korea Exchange
Bank, controlled by Texas-based Lone Star Funds, and Hyundai Investment & Securities
that changed hands to Prudential, a US insurance giant.
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